Environmental Compliance Reactions to R & D Practices and Intellectual Capital: A Worldwide Evidence

Our ecosystem and mainly our natural resources represent a vital ecological portfolio. Environment is good for business at a time business is not keen to invest in compliance measures. Sustaining the environment is costly and adds additional burden. The burden not only financial, it is mainly technical and managerial. Producing renewable energy and maintaining freshwater resource, reducing electricity production and emissions depend also on R & D practices such as trademark and patent applications. This also needs engineers, technicians, scientists and human capabilities with continuous knowledge and intellectual capital. The main research hypothesis has tested the effect of environmental protection and compliance on the R&D in intellectual capital creation. Environmental reactions are measured by “renewable internal freshwater resources”, “electricity production from renewable sources”, “access to electricity” and “alternative and nuclear energy”, while R & D practices are measured by “trademark applications”, “technicians in R&D” and “patent applications”. Research hypotheses has been tested using panel regression analysis according to GMM technique. Using data of 94 countries during the period from 2001 to 2019, findings show that there are significant effect of “trademark applications” on “renewable internal freshwater resources” and of “technicians in R&D” on each of “electricity production from renewable sources” “access to electricity” and “alternative and nuclear energy”. Besides, “patent applications” seems to have significant effect on “alternative and nuclear energy”. Results have found that countries that have made environmental improvements are those who have invested in intellectual capital and made significant steps in improving their environmental R&D Capabilities.