Air Pollution and the Innovation Gap: A Challenge for Sustainable Growth in Emerging and Growth Leading Economies (EAGLE)

Junhui Shi, Umar Farooq (), Mosab I. Tabash, Hosam Alden Riyadh and Tha’er Abdelwahab Almajali
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Junhui Shi: School of Business and Tourism Management, Yunnan University, Kunming 650500, China
Umar Farooq: School of Economics and Finance, Xi’an Jiaotong University, Xi’an 710049, China
Mosab I. Tabash: College of Business, Al Ain University, Al Ain 64141, United Arab Emirates
Hosam Alden Riyadh: Department of Accounting, School of Economics and Business, Telkom University, Bandung 40257, Indonesia
Tha’er Abdelwahab Almajali: Department of Business Technology, Hourani Center for Applied Scientific Research, Business School, Al-Ahliyya Amman University, Amman 19328, Jordan

Sustainability, 2025, vol. 17, issue 10, 1-22

Abstract: As emerging economies play a pivotal role in global growth, understanding the impact of environmental factors, especially air pollution, on innovation is crucial. This study empirically examines the relationship between air pollution and innovation performance in EAGLE (emerging and growth leading economies) using a 20-year dataset (2000–2019) and employing 2SLS (two-stage least square) and FMOLS (fully modified ordinary least square) estimation techniques. The key findings of the study reveal that air pollution hampers R&D activities and patent applications by weakening human capital, diverting resources, and creating an unfavorable research environment. The results remain robust across multiple control variables and alternative estimation techniques. These findings highlight the urgent need for pollution control policies to mitigate its adverse effects on innovation, offering valuable insights for policymakers striving to enhance innovation resilience amid environmental challenges. This study uniquely explores the causal impact of air pollution on the macro-level innovation performance of a country.

Keywords: air pollution; emerging economies; sustainable innovation; research and development; trademark applications (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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