How does technological innovation mitigate CO2 emissions in OECD countries? Heterogeneous analysis using panel quantile regression.

To verify how does the development of technological innovation effectively mitigate carbon dioxide (CO2) emissions in Organization for Economic Co-operation and Development (OECD) countries, this study first investigates the direct impacts and moderating effects of technological innovation, measured by the development of patents on CO2 emissions by employing a balanced panel dataset for 35 OECD countries covering 1996-2015. Also, to examine the potential heterogeneity and asymmetry, the panel quantile regression approach is utilized. The empirical results indicate that technological innovation directly reduces CO2 emissions; however, this impact is significantly heterogeneous and asymmetric across quantiles. Furthermore, through analyzing the influencing mechanism, the technological innovation affects the impacts of economic growth and renewable energy through its moderating effects. Moreover, the moderating effects of technological innovation is also heterogenous. Accordingly, the main contribution of this study is that the potential heterogeneity and asymmetry of both the direct impact and moderating effect of technological innovation on CO2 emissions in OECD countries are systematically analyzed by employing the panel quantile regression approach.