Harnessing the wind: foreign direct investment and green innovation

Bataineh, Mohammad Jamal; Sánchez-Sellero, Pedro; López-Rodríguez, Jesús; Ayad,  Fayssal

Use this link to cite:

https://hdl.handle.net/2183/49044

Harnessing the wind: foreign direct investment and green innovation

Files

LopezRodriguez_Jesus_2026_Harnessing the wind foreign direct investment and green innovation.pdf (511.55 KB)

Identifiers

URI: https://hdl.handle.net/2183/49044

DOI: 10.1007/s00181-026-02937-y

Publication date

2026

Authors

Bataineh, Mohammad Jamal

Sánchez-Sellero, Pedro

López-Rodríguez, Jesús

Ayad, Fayssal

Bibliographic citation

Bataineh, M.J., Sánchez-Sellero, P., López-Rodríguez, J. et al. Harnessing the wind: foreign direct investment and green innovation. Empir Econ 71, 20 (2026). https://doi.org/10.1007/s00181-026-02937-y

Abstract

[Abstract]: This paper examines the impact of foreign direct investment (FDI) exposure, absorptive capacity, R&D practices, and technological advancement on green innovation at the firm level. Leveraging Spanish firm data from the PITEC database, we exploit several econometric methods including dynamic panel regressions, threshold, moderation, and mediation analyses to show that FDI exposure significantly promotes green innovation, with nonlinear effects related to host firm technology when controlling for patents, age, and size of the firm. While we document that absorptive capacity is consistently driving green innovation, we also find that R&D and technology development partially mediate the FDI–green innovation link. Policymakers and stakeholders can leverage these insights to foster sustainable practices by attracting FDI and encouraging R&D and technological advancements.