The Impact of Patent Applications in the Context of the ESG Model at World Level

Leogrande, Angelo and Leogrande, Domenico and Costantiello, Alberto (2023): The Impact of Patent Applications in the Context of the ESG Model at World Level.

Abstract

In the following article, we estimate the value of Patent Applications-PA in the context of the Environmental, Social and Governance-ESG model at world level. We use data from World Bank for 193 countries in the period 2011-2021. We found that PA is positively associated, among others, to “CO_2 Emissions” and “Mammal Species Threated”, and negatively associated among others to “Hospital Beds” and “Research and Development Expenditures”. Furthermore, we found that at aggregate level PA is negatively associated to each macro component of the ESG model i.e.: Environment, Social and Governance. Furthermore, we have applied eight different machine-learning algorithms for the prediction of the future value of PA. We found that the best predictive algorithm is the Simple Regression Tree in terms of minimization of MAE, RMSE and MSE and maximization of R-squared. The value of PA is predicted to growth by an average of 9.82% for the analysed countries.

• Item Type: MPRA Paper
• Language: English
• Keywords: Analysis of Collective Decision-Making; General; Political Processes: Rent-Seeking; Lobbying; Elections; Legislatures; and Voting Behaviour; Bureaucracy; Administrative Processes in Public Organizations; Corruption; Positive Analysis of Policy Formulation; Implementation.
• Subjects: D - Microeconomics > D7 - Analysis of Collective Decision-Making; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D70 - General; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D73 - Bureaucracy ; Administrative Processes in Public Organizations ; Corruption; D - Microeconomics > D7 - Analysis of Collective Decision-Making > D78 - Positive Analysis of Policy Formulation and Implementation

References

[1] Y. Tan and Z. Zhu, “The effect of ESG rating events on corporate green innovation in China: The mediating role of financial constraints and managers' environmental awareness,” Technology in Society, no. 101906, p. 68, 2022.

[2] X. Ren, G. Zeng and Y. Zhao, “Digital finance and corporate ESG performance: Empirical evidence from listed companies in China,” Pacific-Basin Finance Journal, vol. 79, no. 102019, 2023.

[3] L. Chen, M. U. Khurram, Y. Gao, M. Z. Abedin and B. Lucey, “ESG disclosure and technological innovation capabilities of the Chinese listed companies.,” Research in International Business and Finance, no. 101974, p. 65, 2023.

[4] G. Dicuonzo, F. Donofrio, S. Ranaldo and V. Dell'Atti, “The effect of innovation on environmental, social and governance (ESG) practices,” Meditari Accountancy Research, vol. 30, no. 4, pp. 1191-1209, 2022.

[5] O. Exarchos, “The ESG investment boom and its effect on green innovation,” Doctoral dissertation, 2022.

[6] Y. Shao, “Environmental Regulation, Green Innovation and Enterprise ESG Performance,” 2022 International Conference on Bigdata Blockchain and Economy Management (ICBBEM 2022), Atlantis Press., pp. 1500-1508, 2022 .

[7] M. H. Le and W. M. Lu, “An integrated multiple objective decision making approach for exploring the competitiveness of pharmaceutical multinational enterprises,” Annals of Operations Research, pp. 1-26, 2022.

[8] D. C. Broadstock, R. Matousek, M. Meyer and N. G. Tzeremes, “Does corporate social responsibility impact firms' innovation capacity? The indirect link between environmental & social governance implementation and innovation performance,” Annals of Operations Research, pp. 1-26., 2020.

[9] Y. Huang, F. Bai, M. Shang and M. Ahmad, “On the fast track: the benefits of ESG performance on the commercial credit financing,” Environmental Science and Pollution Research, pp. 1-14, 2023.

[10] E. Ioannidis, D. Tsoumaris, D. Ntemkas and I. Sarikeisoglou, “ Correlations of ESG Ratings: A Signed Weighted Network Analysis,” AppliedMath, vol. 2, no. 4, pp. 638-658, 2022.

[11] J. Zheng, M. U. Khurram and L. Chen, “Can green innovation affect ESG ratings and financial performance? evidence from Chinese GEM listed companies,” Sustainability, vol. 14, no. 8677, p. 14, 2022.

[12] Q. Zheng, D. Lin, H. Li and Y. Wang, “Study on the Path of Corporate ESG Performance to Drive Green Innovation--Based on Data of Listed Companies in Sichuan Province,” Proceedings of the 4th Management Science Informatization and Economic Innovation Development Conference, MSIEID 2022 , 2023.

[13] E. Cullen, “ ESG Investing: From Fad to Force,” University of South Carolina , 2022.

[14] X. Wang and S. Hu, “ Can performance-based budgeting reform improve corporate environment in ESG? Evidence from Chinese-listed firms,” Frontiers in Environmental Science, vol. 10, no. 982160, 2022.

[15] D. Wang, Y. Luo, S. Hu and Q. Yang, “Executives’ ESG cognition and enterprise green innovation: Evidence based on executives’ personal microblogs,” Frontiers in Psychology, no. 1053105, p. 13, 2022.

[16] S. Qiang, C. Gang and H. Dawei, “Environmental cooperation system, ESG performance and corporate green innovation: Empirical evidence from China,” Frontiers in Psychology, no. 1096419, p. 14, 2023.

[17] B. Viard and G. Zhang, “Financial Deregulation, ESG Ratings, and Their Impacts,” Hong Kong Institute for Monetary and Financial Research (HKIMR) Research Paper AP, no. 3, 2023.

[18] Q. Yue, Y. Wang and J. Li, “Will enterprise technological innovation enhance the value of energy-based enterprises? Analysis of the Moderating Effect Based on ESG Information Disclosure,” Advances in Education, Humanities and Social Science Research, vol. 1, no. 1, pp. 14-14, 2022.

[19] F. Wang and Z. Sun, “Does the environmental regulation intensity and ESG performance have a substitution effect on the impact of enterprise green innovation: evidence from China,” International Journal of Environmental Research and Public Health, vol. 14, no. 8558, p. 19, 2022.

[20] X. Zhang, “How does Government Support Promote the Relationship between ESG Performance and Innovation?,” Journal of Innovation and Development, vol. 3, no. 2, pp. 89-92, 2023.

[21] M. Akbar, A. Akbar, A. Hussain and M. Ullah, “Environment, social, and governance performance and enterprise innovation capacity: A study of the top 100 global hi-tech firms,” Social, and Governance Performance and Enterprise Innovation Capacity: A Study of the Top, 100., 2021.

[22] J. Li and S. Li, “Environmental protection tax, corporate ESG performance, and green technological innovation,” Frontiers in Environmental Science, no. 1512, 2022.

[23] R. Yao, Y. Fei, Z. Wang, X. Yao and S. Yang, “The Impact of China’s ETS on Corporate Green Governance Based on the Perspective of Corporate ESG Performance,” International Journal of Environmental Research and Public Health, vol. 3, no. 2292, p. 20, 2023.

[24] C. Tolliver, H. Fujii, A. R. Keeley and S. Managi, “Green innovation and finance in Asia,” Asian Economic Policy Review, vol. 16, no. 1, pp. 67-87, 2021.

[25] J. W. Van Der Waal, T. Thijssens and K. Maas, “The innovative contribution of multinational enterprises to the Sustainable Development Goals,” Journal of Cleaner Production, no. 125319, p. 285, 2021.

[26] R. Jacob and P. P. Arcot, “Patents and ESG Compliance in Startups,” available at Research Square, 2023.

[27] A. Valentini, D. Melisi, G. De Pascali, G. Cicala, L. Velardi and A. Massaro, “High-efficiency nanodiamond-based ultraviolet photocathodes,” Consiglio Nazionale delle Richerche CNR Instituto Nazionale di Fisica Nucleare INFN, 2019.

[28] A. Costantiello and A. Leogrande, “The Determinants of CO2 Emissions in the Context of ESG Models at World Level,” SSRN , no. 4425121, 2023.

[29] A. Leogrande and A. Costantiello, “The Labor Force Participation Rate in the Context of ESG Models at World Level,” SSRN , no. 4466452, 2023.

[30] A. Leogrande and A. Costantiello, “The Role of GDP Growth in the ESG Approach at World Level,” SSRN , no. 4434206, 2023.

[31] A. Leogrande, “The Usage of Internet in the Context of ESG Model at World Level,” SSRN , no. 4489987, 2023.

[32] A. Costantiello and A. Leogrande, “The Impact of Research and Development Expenditures on ESG Model in the Global Economy,” SSRN , no. 4414232, 2023.

[33] WB, “Patent applications, residents,” World Bank, [Online]. Available: https://data.worldbank.org/indicator/IP.PAT.RESD. [Accessed 12 07 2023].

[34] WB, “CO2 emissions (metric tons per capita),” [Online]. Available: https://data.worldbank.org/indicator/EN.ATM.CO2E.PC. [Accessed 11 07 2023].

[35] WB, “Electricity production from coal sources (% of total),” [Online]. Available: https://data.worldbank.org/indicator/EG.ELC.COAL.ZS. [Accessed 11 07 2023].

[36] WB, “Mammal species, threatened,” [Online]. Available: https://data.worldbank.org/indicator/EN.MAM.THRD.NO. [Accessed 11 07 2023].

[37] WB, “Life expectancy at birth, total (years),” World Bank, [Online]. Available: https://data.worldbank.org/indicator/SP.DYN.LE00.IN. [Accessed 11 07 2023].

[38] WB, “Literacy rate, adult total (% of people ages 15 and above),” World Bank, [Online]. Available: https://databank.worldbank.org/metadataglossary/world-development-indicators/series/SE.ADT.LITR.ZS. [Accessed 11 07 2023].

[39] WB, “Hospital beds (per 1,000 people),” World Bank, [Online]. Available: https://data.worldbank.org/indicator/SH.MED.BEDS.ZS. [Accessed 11 07 2023].

[40] WB, “GDP growth (annual %),” World Bank, [Online]. Available: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG. [Accessed 11 07 2023].

[41] WB, “Individuals using the Internet (% of population),” World Bank, [Online]. Available: https://data.worldbank.org/indicator/IT.NET.USER.ZS. [Accessed 07 11 2023].

[42] WB, “Ratio of female to male labor force participation rate (%) (national estimate),” World Bank, [Online]. Available: https://data.worldbank.org/indicator/SL.TLF.CACT.FM.NE.ZS. [Accessed 11 07 2023].

[43] WB, “Strength of legal rights index (0=weak to 12=strong),” World Bank, [Online]. Available: https://data.worldbank.org/indicator/IC.LGL.CRED.XQ. [Accessed 11 07 2023].

[44] WB, “Research and development expenditure (% of GDP),” World Bank, [Online]. Available: https://data.worldbank.org/indicator/GB.XPD.RSDV.GD.ZS. [Accessed 11 07 2023].