Greening the Future: Dynamics of Green Innovation in Korea through Patent and Policy Synergies

Green innovation is measured by Environment-Related Patent Applications (ERPA) and analyzed in relation to Information and Communication Technology Imports (ICTI), Research and Development Expenditure (RDE), Environmental Policy Stringency (ENV), Gross Domestic Product per capita Growth (GDPG), and Population Growth (PG). This study examines the determinants of green innovation in South Korea from 1990 to 2023. It uses a time-series econometric approach with a Vector AutoRegression (VAR) model. Analytical methods include Impulse Response Functions (IRFs), Forecast Error Variance Decomposition (FEVD), Granger causality tests, and a Vector Error Correction Model (VECM) to capture both short-run dynamics and long-run equilibrium relationships. ICTI consistently has a positive and significant effect on green innovation, emphasizing the importance of international technology transfer. GDPG is positive in the short run but negative over the long run. Stricter environmental policies initially have a negative effect, but this reverses over time, indicating the need for flexible policy adjustments. PG has a positive long-run effect, while RDE exhibits weak or delayed impacts. This research contributes to the literature by offering a comprehensive time-series analysis of the factors driving green innovation in a developed Asian economy. It highlights the importance of technology openness, adaptive regulation, and macroeconomic factors in fostering green innovation.