Innovation input, governance and climate change: Evidence from emerging countries

•Investment in innovative technologies negatively affect climate change.•Innovation input inversely affect CO2 emissions.•Reductions in CO2 emissions are more pronounced in high innovative countries•Country-level governance factors negatively moderate the effects of innovation input on CO2 emissions This study sheds light on the extent to which innovation input influences CO2 emissions and how country-level governance factors may moderate this relationship. The sample for the study consists of CO2 emissions per capita from 29 emerging countries and 725 country-year observations. We find a negative relationship between innovation input and CO2 emissions, suggesting that countries that invest in innovation combat climate change by reducing CO2 emissions. By separating the sample into low and high innovative countries, the results show that reduction of CO2 emissions is more pronounced in countries with high innovation input. We further establish that country-level governance factors, including political stability, government effectiveness, regulation quality, rule of law and control of corruption all negatively moderate the effects of innovation input on CO2 emissions. Our findings shed new light on the theoretical and practical implications of innovation and country-level governance on climate change initiatives.