Water-Related Technological Innovations and Water Use Efficiency: International Evidence

ABSTRACT

Water-related technological innovations have been increasingly recognized in recent years as promising techniques to solve the water crisis, raising attention in the academic communities of water research and sustainable development. This research thus investigates the relationship between water-related technological innovations and water use efficiency and makes the following contributions. First, this paper validates the significant improvement effects of water-related technological innovations on water use efficiency and notes that such influences will persist over the next 6 years. This finding comes from a panel fixed effects model on a sample of 75 countries from 1997 to 2019 and is verified by a series of robustness tests. In addition, this paper shows that the above improvement impacts are heterogeneous among different countries, and that the impacts are significantly positive in low-income, left-wing, and democratic countries. Lastly, our empirical findings offer an important reference for policymakers to improve water use efficiency and mitigate the water crisis.

KEYWORDS:

• Water-related technological innovations
• water use efficiency
• sustainable development
• panel fixed effects model

JEL:

• O30
• Q25
• F00

Acknowledgement

We are grateful for helpful support and suggestions from Professor Chun-Ping Chang. We are solely responsible for any errors and omissions

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. It is noteworthy that water use efficiency is defined differently because water resources play distinct roles in different industries (Wang et al. 2018). For example, according to Sanderson (2007), “water use efficiency is a measure of the relationship between the amount of water required for a particular job and the amount of water used or occupied.”

2. In academic publications, the term “water innovation” first appeared in 2004 (O’callaghan, Adapa, and Buisman 2020). The term can be found in the titles of publications and refers to water-related technological innovations in Australia water management (Barripp et al. 2004; Bowmer 2004). In general, the aim of water-related technological innovations is to encourage ongoing water management efficiency and effectiveness improvements (Wehn et al. 2016).

3. Due to data availability limitations, we select panel data from 1997 to 2019 for the 75 sample countries. The country list is in Table A1.

4. Data of water use efficiency come from the following website: https://www.fao.org/aquastat/en/databases/maindatabase/.

5. Data of water-related technology come from the following website: https://stats.oecd.org/viewhtml.aspx?datasetcode=PAT_DEV&lang=en#.

6. Data of other control variables come from the following website: https://databank.worldbank.org/source/world-development-indicators/preview/on.

7. The variable definitions and data sources are in Table A2.

8. A patent is a national law-protected technology or innovation that is often issued by a government or regional body representing many nations on the basis of an application. For a limited period, such a document establishes the legal position that the patented innovation may only be executed by others with the patentee’s consent.

9. Scholars argue that comparing patents in fields that are similar is more meaningful than comparing the total number of patent applications per country because the quality and value of patented technology vary greatly across fields. Patents are by far the most appropriate indicator of the degree of innovation (Flikkema, de Man, and Wolters 2010).

10. According to the OECD environmental statistics database, demand-side technologies comprise the following categories: indoor water conservation, irrigation water conservation, and water conservation in thermoelectric power production. Some supply-side technologies include water desalination, water filtration, water and wastewater treatment, water collection (rain, surface, and ground water), water storage and distribution, and water resource protection.

11. The long-term effects of eco-innovation on various facets of society and the economy have gotten a lot of scholarly attention (Auffhammer 2022; Ben Zaied and Ben Cheikh 2015; Chandio et al. 2020).

12. The ideology indicators are consistent with Wang et al. (2019b) and Yang et al. (2022).

13. The democracy indicators are from the database of Bjørnskov and Rode (2020).