How national green innovation shapes stock market capitalization in MENA countries?

Résumé

As countries address the threat of climate change, many developing economies are diversifying their resources.Understanding the association between progress in green innovation and stock market valuation is therefore important for the transition to a low-carbon economy.This study examines the influence of green innovation at the country level on the market value of domestic listed firms across 11 Middle East and North Africa (MENA) countries from 2014 to 2023.The findings reveal a paradoxical relationship between innovation and market valuation.Although a positive correlation suggests that sustainability signals stock market strength, the regression results indicate a negative, statistically significant effect when heterogeneity and endogeneity are controlled for.These results indicate that country heterogeneity matters and that green innovation currently imposes a short-term financial burden rather than generating a valuation premium in MENA stock markets.This may reflect high costs and the reallocation of resources towards conventional energy and research and development (R&D), positioning these economies in the early phase of the transition to a low-carbon economy.This paper contributes to the literature by identifying green innovation development as a significant determinant of stock market valuation.It also suggests that policymakers should prioritise policy-led development, including intellectual property protection, R&D subsidies, and tax credits, to offset transition costs and help green innovation to strengthen stock market resilience and achieve low-carbon economies in the MENA region.

Citer ce document

Accès au document

Texte intégral en lecture en ligne, réservé aux abonnés SPHAERO et aux membres de l'institution. Se connecter

Auteur(s)

Statistiques

Consultations : 1

Téléchargements : 0