How trade networks shape green innovation resilience: Evidence from the U.S. energy shock

The U.S. shale revolution induced a major shift in the structure of U.S. energy supply, with heterogeneous consequences for global green transition incentives transmitted through trade networks. This paper exploits the shale revolution as an exogenous U.S. supply shock and combines it with the structure of the global fossil fuel trade network to estimate the effect of changing energy geopolitics on national green innovation. Understanding this effect is central to the security and efficiency trade-off in energy transitions. Using panel data for 137 countries over 2002–2022, we implement a Bartik-style shift–share design that interacts temporal variation in U.S. net oil import dependence with countries' pre-shale network centrality to measure structural exposure. The estimates indicate that countries located near the center of the trade network exhibit a significantly stronger green innovation response to U.S. energy independence than peripheral countries. Mechanism evidence is consistent with a strategic-autonomy channel: innovation responses are concentrated among long-term net importers and larger economies, whereas resource exporters show no statistically significant reaction. For importers deeply embedded in the global network, the shift of the United States from market stabilizer to competitor appears to have heightened concerns about supply security, consistent with security-oriented innovation incentives that partially offset the cost-reducing effect of lower oil prices.