Decoding competitive advantage in low-carbon technology: the role of environmental technology investions management

Achieving sustainable development goals relies mainly on the transition from fossil fuels to green alternatives. Rising environmental concerns have created a new market for low-carbon technologies and products. As a result, achieving a competitive advantage in low-carbon technologies has become increasingly important for sustainable economic development. This study explores the impact of environmental management practices on competitive advantage in low-carbon technologies across 37 OECD countries, using panel data from 1995 to 2023. Specifically, the study examines the role of environmental invention, environmental taxation, low-carbon technology imports, public R&D in industrial production, and public R&D in energy technologies. To achieve this objective, the study employs advanced instrumental variable quantile regression analysis to capture heterogeneous effects across different levels of competitiveness. The findings reveal heterogeneous effects of environmental inventions, environmental taxation, low-carbon technology imports, public R&D in industrial production, and public R&D in energy technologies on competitive advantage in low-carbon technologies. An increase in environmental taxation has a significant positive effect on competitive advantage, which supports the Porter hypothesis, whereas environmental inventions, low-carbon technology imports, and public R&D spending have differential impacts based on the maturity of prevailing innovation ecosystems. The findings provide practical implications for policymakers and industry stakeholders by highlighting the importance of green innovation incentives, low-carbon technology imports, and adaptive public R&D funding. These policies can strengthen national competitiveness in low-carbon technologies and facilitate the transition toward a sustainable low-carbon economy.