Meta-Analysis of Competitiveness and Innovation and Carbon Taxation Strategic Adaptation: An Implication for Developing Economies

Abstract

The purpose of this study was to systematically review and conduct a meta-analysis on the relationship between competitiveness and innovation, and carbon taxation strategic adaptation. The competitiveness and innovation, particularly employment, total productivity, and foreign direct investment capability of a nation, could predict the adoption of carbon taxation strategies, especially in developing economies where the need for economic growth and development may override the need to address the existential threat of climate change. Carbon taxation, environmental tax, green tax, and carbon emissions trading have been shown to catalyze the reduction of carbon dioxide emissions, which is a key ingredient of climate change. Using data drawn from Scopus and Web of Science databases, a total of 16 articles were reviewed and included in meta-analysis following the guidance of the PRISMA flowchart. The findings of the study revealed that random-effects results indicated pooled effect μ = -0.014 (SE = 0.005; 95% CI -0.024, -0.005; k = 16); heterogeneity Q(15) = 50.15, p = 1.1×10⁻⁵; I² = 70.1%; τ² = 0.000204; 95% PI -0.044 to 0.015; region differences not significant (Q-between(2) = 0.15, p = 0.926). The findings reveal a small negative average with substantial heterogeneity and a PI crossing zero, which implies that outcomes are design-sensitive to exposure, safeguards, credibility of ramps, and innovation finance. It was concluded that transitional pressures exist but are not universal because with credible, innovation-oriented design, net competitiveness and innovation effects often cluster near neutral. The study recommends that governments legislate inflation-indexed ramps, maximize coverage with temporary, targeted EITE safeguards, recycle revenues to productivity and innovation, particularly on R&D, clean capex, and skills. It should equally reduce non-price frictions that are permitting, and infrastructure to enable firms to respond by investing rather than retrenching to cut costs.