Abstract
All related economic actors have been interested in combating climate change as consistent with developing interest in environmental issues. In this context, R&D investment funds can be highly beneficial in developing environmental patents, which may have a key role in solving environmental problems. Accordingly, the study analyzes the marginal effect of sub-types of R&D investments on environment-related patents by focusing on the USA and Canada as the leading R&D investing countries, using data between 1990 and 2021, and adopting a kernel-based regularized least squares (KRLS) model. The results show that on the patents (i) R&D investments in cross-cutting technologies/research, nuclear, and renewable have a stimulating effect in the USA; (ii) R&D investments in renewable support the increase in Canada; (iii) in both USA and Canada, R&D investments in fossil fuels have a decreasing effect, whereas R&D investments in energy efficiency have no significant effect; (iv) Among all, R&D investments in cross cutting technologies/research (renewable) have the highest increasing effect on the patents in USA (Canada); (v) marginal effect of the sub-types of R&D investments on the patents varies across factors, countries, and percentiles; (vi) the KRLS model has a high prediction performance, reaching ~97.1%. Overall, the study emphasizes the average and pointwise marginal effects of R&D investments on the patents, which imply that R&D investments should be re-distributed by considering their effects on the patents so that a successful policy on environmental patents can be designed by benefitting energy-related R&D investments.
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