DO ECONOMIC OPENNESS AND INSTITUTIONAL QUALITY INFLUENCE ENVIRONMENTAL PATENTS? EMPIRICAL EVIDENCE FROM SOUTH ASIA

This study aims to analyze the association between environmental patents and trade openness, institutional quality and Foreign Direct Investments (FDI) in the South Asia countries from 1996-2016 through GMM methodology to show some interesting outcomes. Although, as expected, the institutional quality is an integral part of the development of environmental innovation, the trade openness and FDI influence it in different ways. The trade openness encourages environmental patents, while foreign investments negatively influence them. We further articulate institutional quality influences on these indicators as institutional quality is responsible for enhancing economic openness. Government stability positively impacts on the environmental patents, while bureaucratic quality, democratic accountability and corruption negatively impact on the development of the environmental patents. On the basis of our empirical analysis, we suggest that South Asian countries must reforms institutional regulations to promote scientific innovations. Additionally, we encourage South Asian economies to restructure the legal infrastructure as an efficient institutional and legal environment will protect the innovation process.