Linking foreign investment and eco-innovation to sustainable development goals through a spatial mediation-moderation model

Abstract

Sustainable development is affected by environmental problems and climate change, which are frequently attributed to economic growth. Greener economies, therefore, rely heavily on technological advancements. Environmental conditions keep deteriorating despite increasing eco-innovations and foreign investments in most developing nations. Consequently, it is crucial to connect these constructs to the sustainable development goals (SDGs) to address climate hazards, reduce poverty, and achieve a sustainable transition while maintaining economic growth. In this paper, we use the geographic Durbin model to examine the effects of economic growth on carbon emissions while connecting the SDGs for nine countries in the Middle East and North African region during the last 20 years. Second, the paper investigates the mediation effect of eco-innovation-related SDGs. Third, this article uses the spatial stepwise regression model to explore the moderating function of FDI-related SDGs on the mediation model. The findings of this paper are that: (i) Economic growth positively impacts carbon emissions that derail the realization of the various SDGs. (ii) Eco-innovation-related SDGs mediate the relationship between economic growth and carbon emissions; (iii) FDI-related SDGs have a dual moderating effect on the mediation model. This research advances our understanding of how the variables mentioned above maximize the efforts geared towards mitigating climate stressors and reducing poverty in pursuit of attaining a desired future.