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Geopolitically induced investments in biofuels

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  • Brutschin, Elina
  • Fleig, Andreas

Abstract

While supply disruptions of oil imports are widely considered a serious threat to a country's energy and overall national security, systematic investigations into the effects of security concerns on investments in energy technology are rare. Complementing existing energy policy literature, this paper investigates the impact of conflict involvement of major oil suppliers on RD&D expenditures in biofuels among import-dependent economies, i.e. geopolitically induced investments. Utilizing the recently released data set on Integrated Crisis Early Warning System (ICEWS), our sample comprises information on 12 EU member states from 1997 to 2014. Among those we find that RD&D expenditures in biofuels are positively associated with the conflict involvement of the respective country's major oil supplier. The results are robust across different model specifications and measurements of conflict. We argue that joining arguments from political economy and conflict research can help to explain the heterogeneous pattern of investments in energy technology in resource-poor European countries. In addition, it increases our understanding of innovation activities within the energy sector.

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  • Brutschin, Elina & Fleig, Andreas, 2018. "Geopolitically induced investments in biofuels," Energy Economics, Elsevier, vol. 74(C), pages 721-732.
    • Handle: RePEc:eee:eneeco:v:74:y:2018:i:c:p:721-732
    DOI: 10.1016/j.eneco.2018.06.013
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    Cited by:

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    More about this item

    Keywords

    Biofuels; Energy security; Oil supply; RD&D expenditures;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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