How do supply chain disruptions, digitalization, and environmental policies shape renewable energy innovation in the United Kingdom? A wavelet quantile regression analysis

Ying-Yi Cao; Sheena Rehman; Mohammad Subhan; Joshua Chukwuma Onwe; Khatib Ahmad Khan

doi:10.1016/j.jenvman.2025.126434

How do supply chain disruptions, digitalization, and environmental policies shape renewable energy innovation in the United Kingdom? A wavelet quantile regression analysis

J Environ Manage. 2025 Jul 5:391:126434. doi: 10.1016/j.jenvman.2025.126434. Online ahead of print.

Authors

Ying-Yi Cao¹, Sheena Rehman², Mohammad Subhan³, Joshua Chukwuma Onwe⁴, Khatib Ahmad Khan⁵

Affiliations

¹ School of Economics, Northwest Minzu University, Lanzhou, Gansu, China. Electronic address: cyy@xbmu.edu.cn.
² School of Management, IMS Unison University, Dehradun, Uttarakhand, India. Electronic address: reh22sheena@gmail.com.
³ School of Business, Woxsen University, 502345, Hyderabad, India. Electronic address: subhan8860@gmail.com.
⁴ School of Business Studies and Management Technology, Federal Polytechnic Ohodo, Enugu State, Nigeria; Department of Applied Economics, UNIZIK Business School, Nnamdi Azikiwe University, Akwa, Nigeria. Electronic address: onwejoshuaa@gmail.com.
⁵ School of Business, Xi'an International University, Xi'an, 710077, China. Electronic address: khatib786@xaiu.edu.cn.

PMID: 40618610
DOI: 10.1016/j.jenvman.2025.126434

Abstract

The surge of climate vulnerability has prompted countries around the world to promote green innovation, specifically renewable energy innovation (REI), as a promising solution for the sustainability of the environment. Given this, the need to understand the dynamic relationships between supply chain disruptions (SCD), digitalization (DIG), energy productivity (EP), environmental policy stringency (EPS), corruption (CRP), and financial development (FD) with REI in the United Kingdom (UK) is critical for driving renewable energy development. For achieving the objective of the study, quarterly time-series data from 1990Q1 to 2020Q4 were analyzed and to capture the nonlinear and time-varying dynamics of relationships, advanced econometric techniques, namely Wavelet Quantile Regression (WQR) and Wavelet Quantile Correlation (WQC), Quantile-on-Quantile Kernel-Based Regularized Least Squares (QQKRLS) and Quantile-on-Quantile Granger Causality (QQGC) were employed. Findings from the study revealed that EP and DIG have a modest but growing positive impact on REI over the long term, while EPS significantly drives REI in the short to medium term, though its effectiveness diminishes over time. SCD generally hinders REI, particularly in the medium and long term, while CRP consistently exerts a negative influence across all timeframes. FD positively impacts REI in the short and medium term but shows mixed effects in the long term, suggesting potential diminishing returns. The implications of this study underlines the vitality of REI in mitigating climate vulnerability and offer vital suggestions for policymakers to promote and boost REI in the UK.

Keywords: Digitalization; Financial development; Green innovation; Supply chain; Sustainability.