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Purpose This study examines the role of monetary and fiscal policies in shaping innovation for a balanced panel sample of seven emerging and five advanced Asian economies. Design/methodology/approach Using the Driscoll–Kraay estimator as a baseline technique and panel-corrected standard errors and kernel-based regularised least squares as robust methods, this study explores the factors that influence innovation in both emerging and advanced Asian economies from 1990 to 2021. Based on the Morgan Stanley Capital International categorisation, this study has used a sample of seven emerging and five advanced Asian nations to empirically understand the factors shaping innovation. Findings The findings indicate that broad money and economic growth have positive effects on innovation, whereas tax revenue, governance quality and economic globalisation indicate negative effects in emerging Asia. The findings further indicate that tax revenue, economic growth, governance quality and economic globalisation favour innovation in advanced Asia. The authors also find an adverse impact of broad money on total innovation in advanced Asia. Originality/value These findings are quite helpful for the stakeholders and policymakers looking for efficient and long-lasting innovation initiatives.