Does outward foreign direct investment influence renewable energy innovation technology? The role of environmental policy and research & development in belt and road initiative regions

This study addresses the research gap in understanding the interplay between outward foreign direct investment (OFDI), environmental policy (ENPO), and research and development (REDE) in driving renewable energy innovation technology (REIT) within the Belt and Road Initiative (BRI) countries. Despite the growing emphasis on sustainable development, limited research has explored how these factors collectively influence REIT across diverse economic and regulatory landscapes. Using data from 2005 to 2022, this study provides empirical insights into their dynamic relationships, offering a comprehensive perspective on the mechanisms shaping renewable energy innovation in BRI nations. Using panel cointegration, the Panel Autoregressive Distributed Lag (ARDL) model and causality analysis on data from 13 BRI economies reveal that OFDI hinders REIT as international investments divert capital from domestic renewable energy. However, stringent ENPO fosters environmentally friendly technology, benefiting long-term development. Knowledge spillovers from OFDI and REDE support REIT in the short term. The study highlights reciprocal links between OFDI and ENPO and how REIT influences investments and environmental regulations, demonstrating complex interactions. Coordinated policies promoting foreign investment, R&D, strict environmental regulations, and regional cooperation are recommended to maximize socioeconomic benefits from REIT. The findings emphasize the BRI's potential to accelerate sustainable development through strategic alignment of financial, technological, and regulatory frameworks.