Abstract
This study explores the spatial spillover and non-linear effects of green innovation (Gi) on environmental balance (EB) in the context of globalization and environmental challenges. The specific objectives of the study are twofold: (i) to examine the spatial spillover effects of Gi on EB at local and global scales and (ii) to test whether Gi follows a linear or non-linear (inverted U-shaped) pattern in impacting EB. Using spatial econometric techniques and panel data from 60 high- and middle-income countries (1990–2022), the study confirms significant spatial spillovers of Gi on EB. The results reveal that Gi initially worsens EB by widening the ecological footprint-biocapacity gap but improves it beyond a critical threshold, confirming the existence of non-linear and U-shaped pattern between Gi and EB. A positive spatial relationship in EB is identified, characterized by high-high and low-low agglomeration patterns. While globalization (Gb) has dual effects, disrupting EB locally and globally but has beneficial effects when interacting with Gi. The findings offer critical policy implications for sustainable environmental practices.