Does natural-resource-dependency create the need of green innovation?

This paper examines the relationship between natural-resource-dependency and green innovation. Specifically, we analyse the effect of natural resources on green innovation across sixty different countries during the 2010–2018 period. We collect data from various sources, such as the World Development Indicators, World Governance Indicators and Organisation for Economic Co-operation and Development (OECD) statistics. The findings show that reliance on natural resources positively and significantly affects green innovation, particularly for oil and gas rich countries. This positive effect is more pronounced in OECD countries. Further analyses show that carbon emissions significantly moderate the relationship between natural resource dependency and green innovation. This study has policy and practical implications and suggests that governments and policy-makers should prioritise investment in green innovation. They should build green recovery strategies by offering incentives and encouraging firms to develop green innovation as a sustainable practice. •Natural resource dependency has an important impact on green innovation.•Carbon emissions moderates NRDC and green innovation relationship.•Most OECD countries view green innovation as a way to curb environmental effects.•Natural resources and green innovation is much stronger in OECD than non-OECD.