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Determinants of innovation in energy intensive industry and implications for energy policy

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  • Song, ChiUng
  • Oh, Wankeun

Abstract

The Korean government adopted “green growth” in 2008 as an environmentally friendly growth strategy. The energy efficiency of Korea, however, is still relatively low due to the large portion of energy intensive industry (EII) in its manufacturing sector. To improve energy efficiency in Korea, from an EII perspective a new approach has to be taken because restructuring entire industries would take too much time and be too costly. This study aims to emphasize the importance of innovation and analyze the effects of R&D on product and process innovations in EII in Korea. The Probit model is adopted to estimate the effects of eight determinants in the Korea Innovation Survey 2008 data. The results of this study demonstrate that one of the most important determinants, the R&D personnel ratio, has a strong positive effect on both product and process innovation, while another determinant, R&D intensity, only has a strong and positive effect on process innovation in EII. Because of the resulting innovation, energy policies should be enacted to enhance energy efficiency. Thus, the Korean government should keep providing incentives for firms in EII to invest more financial and human resources in their R&D activities.

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  • Song, ChiUng & Oh, Wankeun, 2015. "Determinants of innovation in energy intensive industry and implications for energy policy," Energy Policy, Elsevier, vol. 81(C), pages 122-130.
    • Handle: RePEc:eee:enepol:v:81:y:2015:i:c:p:122-130
    DOI: 10.1016/j.enpol.2015.02.022
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    3. Dziallas, Marisa & Blind, Knut, 2019. "Innovation indicators throughout the innovation process: An extensive literature analysis," Technovation, Elsevier, vol. 80, pages 3-29.
    4. Boyoon Chang & Sung Jin Kang & Tae Yong Jung, 2019. "Price and Output Elasticities of Energy Demand for Industrial Sectors in OECD Countries," Sustainability, MDPI, vol. 11(6), pages 1-17, March.
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    6. Jinpeng Liu & Li Wang & Mohan Qiu & Jiang Zhu, 2016. "Promotion Potentiality and Optimal Strategies Analysis of Provincial Energy Efficiency in China," Sustainability, MDPI, vol. 8(8), pages 1-17, August.
    7. Alexander Nickolaevich Melnik & Kirill Andreevich Ermolaev & Mikhail Sergeevich Kuzmin, 2019. "Mechanism for Adjustment of the Companies Innovative Activity Control Indicators to Their Strategic Development Goals," Global Journal of Flexible Systems Management, Springer;Global Institute of Flexible Systems Management, vol. 20(3), pages 189-218, September.
    8. Kim, Yong-Gun & Yoo, Jonghyun & Oh, Wankeun, 2015. "Driving forces of rapid CO2 emissions growth: A case of Korea," Energy Policy, Elsevier, vol. 82(C), pages 144-155.
    9. Ghassim, Babak & Foss, Lene, 2021. "Understanding the micro-foundations of internal capabilities for open innovation in the minerals industry: a holistic sustainability perspective," Resources Policy, Elsevier, vol. 74(C).
    10. Lawrence, Akvile & Karlsson, Magnus & Nehler, Therese & Thollander, Patrik, 2019. "Effects of monetary investment, payback time and firm characteristics on electricity saving in energy-intensive industry," Applied Energy, Elsevier, vol. 240(C), pages 499-512.
    11. Piotr Tomasz Makowski & Yuya Kajikawa, 2021. "Automation-driven innovation management? Toward Innovation-Automation-Strategy cycle," Papers 2103.02395, arXiv.org.
    12. Xuanzhi Yang & Zhaofang Zhang & Wei Luo & Zhen Tang & Xin Gao & Zhongchi Wan & Xin Zhang, 2019. "The Impact of Government Role on High-Quality Innovation Development in Mainland China," Sustainability, MDPI, vol. 11(20), pages 1-19, October.
    13. Overland, Indra & Sabyrbekov, Rahat, 2022. "Know your opponent: Which countries might fight the European carbon border adjustment mechanism?," Energy Policy, Elsevier, vol. 169(C).
    14. Shuxing Chen & Xiangyang Du & Junbing Huang & Cheng Huang, 2019. "The Impact of Foreign and Indigenous Innovations on the Energy Intensity of China’s Industries," Sustainability, MDPI, vol. 11(4), pages 1-18, February.
    15. Li, Ke & Lin, Boqiang, 2017. "An application of a double bootstrap to investigate the effects of technological progress on total-factor energy consumption performance in China," Energy, Elsevier, vol. 128(C), pages 575-585.
    16. Yang, Qi-Cheng & Zheng, Mingbo & Chang, Chun-Ping, 2022. "Energy policy and green innovation: A quantile investigation into renewable energy," Renewable Energy, Elsevier, vol. 189(C), pages 1166-1175.
    17. Alexander Melnik & Kirill Ermolaev, 2020. "Strategy Context of Decision Making for Improved Energy Efficiency in Industrial Energy Systems," Energies, MDPI, vol. 13(7), pages 1-28, March.
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    19. Makowski, Piotr Tomasz & Kajikawa, Yuya, 2021. "Automation-driven innovation management? Toward Innovation-Automation-Strategy cycle," Technological Forecasting and Social Change, Elsevier, vol. 168(C).

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    More about this item

    Keywords

    Energy efficiency; R&D; Energy intensive industry; Innovation;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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