Green diversification, global knowledge sourcing and local skill composition: Evidence from the US

This work investigates the role of green foreign direct investments (FDIs) and local skill composition for regional technological diversification in green domains. We conduct the analysis on 287 US Metropolitan Statistical Areas (MSAs) observed from 2003 to 2018. Our results show that diversification in green technological domains is more likely to take place in MSAs with higher volumes of green FDIs and higher intensity of abstract skills. Moreover, we find that the local endowment of abstract and routine skills moderates the impact of green FDIs, activating compensation and reinforcing mechanisms, respectively. The findings of this work provide novel insights for the academic debate on the determinants of green technological diversification and for the design of an effective policy toolbox to sustain the regional green transition.