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More where that came from: Induced innovation in the american oil and gas sectors

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  • Daniels, Bryce
  • Johnson, Daniel K.N.

Abstract

Induced innovation theory suggests that a change in relative input prices will result in a substitution effect not only toward cheaper alternatives, but toward innovative activity that will lead to new alternatives. Here we test whether the same holds true for output prices: does innovation in the oil and gas sector respond positively to a rise in energy prices? We model the share of total granted U.S. patents that are related to oil and gas as a function of expected future commodity prices, production levels of each commodity and previous innovations (or stocks of knowledge). We find a significant, positive and highly elastic correlation between expected commodity prices and innovation.

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  • Daniels, Bryce & Johnson, Daniel K.N., 2019. "More where that came from: Induced innovation in the american oil and gas sectors," Resources Policy, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:jrpoli:v:64:y:2019:i:c:s0301420719303472
    DOI: 10.1016/j.resourpol.2019.101451
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    References listed on IDEAS

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    Cited by:

    1. Wang, Xue & Fan, Li-Wei & Zhang, Hongyan, 2023. "Policies for enhancing patent quality: Evidence from renewable energy technology in China," Energy Policy, Elsevier, vol. 180(C).
    2. Wilson, Kenneth & Vellinga, Nico, 2022. "Natural resource dependence and innovation efficiency reconsidered," Resources Policy, Elsevier, vol. 77(C).

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