IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Environmental policies, competition and innovation in renewable energy

  • Nesta, Lionel
  • Vona, Francesco
  • Nicolli, Francesco

We investigate the effect of environmental policies on innovation under different levels of competition. Using information regarding renewable energy policies, competition and green patents for OECD countries since the late 1970s, we develop a pre-sample mean count-data econometric specification that accounts for the endogeneity of policies. We find that renewable energy policies are more effective in fostering green innovation in countries with liberalized energy markets. We also find that environmental policies are crucial only in the generation of high-quality green patents, whereas competition enhances the generation of low-quality green patents.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0095069614000060
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 67 (2014)
Issue (Month): 3 ()
Pages: 396-411

as
in new window

Handle: RePEc:eee:jeeman:v:67:y:2014:i:3:p:396-411
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622870

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Philippe Aghion & Nicholas Bloom & Richard Blundell & Rachel Griffith & Peter Howitt, 2002. "Competition and innovation: an inverted U relationship," IFS Working Papers W02/04, Institute for Fiscal Studies.
  2. Lanjouw, Jean Olson & Mody, Ashoka, 1996. "Innovation and the international diffusion of environmentally responsive technology," Research Policy, Elsevier, vol. 25(4), pages 549-571, June.
  3. Verdolini, Elena & Galeotti, Marzio, 2011. "At home and abroad: An empirical analysis of innovation and diffusion in energy technologies," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 119-134, March.
  4. Richard G. Newell, 2011. "The Energy Innovation System: A Historical Perspective," NBER Chapters, in: Accelerating Energy Innovation: Insights from Multiple Sectors, pages 25-47 National Bureau of Economic Research, Inc.
  5. Pollitt, Michael G., 2012. "The role of policy in energy transitions: Lessons from the energy liberalisation era," Energy Policy, Elsevier, vol. 50(C), pages 128-137.
  6. Rachel Griffith & Rupert Harrison & Helen Simpson, 2010. "Product Market Reform and Innovation in the EU," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(2), pages 389-415, 06.
  7. Fischer, Carolyn & Newell, Richard G., 2008. "Environmental and technology policies for climate mitigation," Journal of Environmental Economics and Management, Elsevier, vol. 55(2), pages 142-162, March.
  8. Nemet, Gregory F. & Kammen, Daniel M., 2007. "U.S. energy research and development: Declining investment, increasing need, and the feasibility of expansion," Energy Policy, Elsevier, vol. 35(1), pages 746-755, January.
  9. Levy Yeyati, Eduardo & Sturzenegger, Federico & Reggio, Iliana, 2010. "On the endogeneity of exchange rate regimes," European Economic Review, Elsevier, vol. 54(5), pages 659-677, July.
  10. Blundell, Richard & Griffith, Rachel & Van Reenen, John, 1995. "Dynamic Count Data Models of Technological Innovation," Economic Journal, Royal Economic Society, vol. 105(429), pages 333-44, March.
  11. Philippe Aghion & Antoine Dechezlepretre & David Hemous & Ralf Martin & John Van Reenen, 2012. "Carbon taxes, path dependency and directed technical change: evidence from the auto industry," LSE Research Online Documents on Economics 48936, London School of Economics and Political Science, LSE Library.
  12. Staffan Jacobsson & Anna Bergek, 2004. "Transforming the energy sector: the evolution of technological systems in renewable energy technology," Industrial and Corporate Change, Oxford University Press, vol. 13(5), pages 815-849, October.
  13. Evens Salies, 2009. "A test of the Schumpeterian hypothesis in a panel Of European electric utilities," Documents de Travail de l'OFCE 2009-19, Observatoire Francais des Conjonctures Economiques (OFCE).
  14. Lans Bovenberg, A. & Smulders, Sjak, 1995. "Environmental quality and pollution-augmenting technological change in a two-sector endogenous growth model," Journal of Public Economics, Elsevier, vol. 57(3), pages 369-391, July.
  15. David Popp, 2002. "Induced Innovation and Energy Prices," American Economic Review, American Economic Association, vol. 92(1), pages 160-180, March.
  16. Jamasb, T. & Pollitt, M.G., 2009. "Electricity Sector Liberalisation and Innovation: An Analysis of the UK Patenting Activities," Cambridge Working Papers in Economics 0902, Faculty of Economics, University of Cambridge.
  17. Chang, Chun Ping & Berdiev, Aziz N., 2011. "The political economy of energy regulation in OECD countries," Energy Economics, Elsevier, vol. 33(5), pages 816-825, September.
  18. Zvi Griliches, 1990. "Patent Statistics as Economic Indicators: A Survey," NBER Working Papers 3301, National Bureau of Economic Research, Inc.
  19. Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1999. "The Induced Innovation Hypothesis And Energy-Saving Technological Change," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 941-975, August.
  20. Paroma Sanyal & Suman Ghosh, 2013. "Product Market Competition and Upstream Innovation: Evidence from the U.S. Electricity Market Deregulation," The Review of Economics and Statistics, MIT Press, vol. 95(1), pages 237-254, March.
  21. Lehtonen, Markku & Nye, Sheridan, 2009. "History of electricity network control and distributed generation in the UK and Western Denmark," Energy Policy, Elsevier, vol. 37(6), pages 2338-2345, June.
  22. Paul Conway & Véronique Janod & Giuseppe Nicoletti, 2005. "Product Market Regulation in OECD Countries: 1998 to 2003," OECD Economics Department Working Papers 419, OECD Publishing.
  23. Reiche, Danyel & Bechberger, Mischa, 2004. "Policy differences in the promotion of renewable energies in the EU member states," Energy Policy, Elsevier, vol. 32(7), pages 843-849, May.
  24. Philippe Aghion & Mathias Dewatripont & Luosha Du & Ann Harrison & Patrick Legros, 2012. "Industrial Policy and Competition," NBER Working Papers 18048, National Bureau of Economic Research, Inc.
  25. Sterlacchini, Alessandro, 2010. "Energy R&D in private and state-owned utilities: an analysis of the major world electric companies," MPRA Paper 20972, University Library of Munich, Germany.
  26. Esty, Daniel C. & Porter, Michael E., 2005. "National environmental performance: an empirical analysis of policy results and determinants," Environment and Development Economics, Cambridge University Press, vol. 10(04), pages 391-434, August.
  27. Blundell, Richard & Griffith, Rachel & Windmeijer, Frank, 2002. "Individual effects and dynamics in count data models," Journal of Econometrics, Elsevier, vol. 108(1), pages 113-131, May.
  28. Winter, Sidney G., 1984. "Schumpeterian competition in alternative technological regimes," Journal of Economic Behavior & Organization, Elsevier, vol. 5(3-4), pages 287-320.
  29. Nick Johnstone & Ivan Haščič & David Popp, 2010. "Renewable Energy Policies and Technological Innovation: Evidence Based on Patent Counts," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(1), pages 133-155, January.
  30. Fiorio, Carlo V. & Florio, Massimo, 2013. "Electricity prices and public ownership: Evidence from the EU15 over thirty years," Energy Economics, Elsevier, vol. 39(C), pages 222-232.
  31. Hans Pitlik, 2007. "A race to liberalization? Diffusion of economic policy reform among OECD-economies," Public Choice, Springer, vol. 132(1), pages 159-178, July.
  32. Eaton, B Curtis & Lipsey, Richard G, 1979. "The Theory of Market Pre-emption: The Persistence of Excess Capacity and Monopoly in Growing Spatial Markets," Economica, London School of Economics and Political Science, vol. 46(182), pages 149-58, May.
  33. Francesco Nicolli & Francesco Vona, 2012. "The Evolution of Renewable Energy Policy in OECD Countries: Aggregate Indicators and Determinants," Working Papers 2012.51, Fondazione Eni Enrico Mattei.
  34. Mody, Ashoka & Roy, Subhendu & Wheeler, David & Dasgupta, Susmita, 1995. "Environmental regulation and development : a cross-country empirical analysis," Policy Research Working Paper Series 1448, The World Bank.
  35. John A., List & Daniel, Sturm, 2006. "How Elections Matter: Theory and Evidence from Environmental Policy," Discussion Papers in Economics 768, University of Munich, Department of Economics.
  36. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-38, July.
  37. Klepper, Steven, 1996. "Entry, Exit, Growth, and Innovation over the Product Life Cycle," American Economic Review, American Economic Association, vol. 86(3), pages 562-83, June.
  38. Herschel I. Grossman & Suk Jae Noh, 1990. "A Theory Of Kleptocracy With Probabilistic Survival And Reputation," Economics and Politics, Wiley Blackwell, vol. 2(2), pages 157-171, 07.
  39. Adam B. Jaffe & Karen Palmer, 1996. "Environmental Regulation and Innovation: A Panel Data Study," NBER Working Papers 5545, National Bureau of Economic Research, Inc.
  40. Brunnermeier, Smita B. & Cohen, Mark A., 2003. "Determinants of environmental innovation in US manufacturing industries," Journal of Environmental Economics and Management, Elsevier, vol. 45(2), pages 278-293, March.
  41. Downing, Paul B. & White, Lawrence J., 1986. "Innovation in pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 13(1), pages 18-29, March.
  42. Jacobsson, Staffan & Johnson, Anna, 2000. "The diffusion of renewable energy technology: an analytical framework and key issues for research," Energy Policy, Elsevier, vol. 28(9), pages 625-640, July.
  43. Dooley, J J, 1998. "Unintended consequences: energy R&D in a deregulated energy market," Energy Policy, Elsevier, vol. 26(7), pages 547-555, June.
  44. Pitlik, Hans & Wirth, Steffen, 2003. "Do crises promote the extent of economic liberalization?: an empirical test," European Journal of Political Economy, Elsevier, vol. 19(3), pages 565-581, September.
  45. Fredriksson, Per G. & Neumayer, Eric & Damania, Richard & Gates, Scott, 2005. "Environmentalism, democracy, and pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 49(2), pages 343-365, March.
  46. Murdoch, James C. & Sandler, Todd, 1997. "The voluntary provision of a pure public good: The case of reduced CFC emissions and the Montreal Protocol," Journal of Public Economics, Elsevier, vol. 63(3), pages 331-349, February.
  47. Popp, David & Hascic, Ivan & Medhi, Neelakshi, 2011. "Technology and the diffusion of renewable energy," Energy Economics, Elsevier, vol. 33(4), pages 648-662, July.
  48. Acemoglu, Daron & Aghion, Philippe & Bursztyn, Leonardo & Hemous, David, 2010. "The Environment and Directed Technical Change," Seminar Papers 762, Stockholm University, Institute for International Economic Studies.
  49. Hadjilambrinos, Constantine, 2000. "Understanding technology choice in electricity industries: a comparative study of France and Denmark," Energy Policy, Elsevier, vol. 28(15), pages 1111-1126, December.
  50. Loiter, Jeffrey M. & Norberg-Bohm, Vicki, 1999. "Technology policy and renewable energy: public roles in the development of new energy technologies," Energy Policy, Elsevier, vol. 27(2), pages 85-97, February.
  51. Fredriksson, Per G. & Vollebergh, Herman R. J. & Dijkgraaf, Elbert, 2004. "Corruption and energy efficiency in OECD countries: theory and evidence," Journal of Environmental Economics and Management, Elsevier, vol. 47(2), pages 207-231, March.
  52. Smiley, Robert, 1988. "Empirical evidence on strategic entry deterrence," International Journal of Industrial Organization, Elsevier, vol. 6(2), pages 167-180.
  53. Popp, David, 2006. "International innovation and diffusion of air pollution control technologies: the effects of NOX and SO2 regulation in the US, Japan, and Germany," Journal of Environmental Economics and Management, Elsevier, vol. 51(1), pages 46-71, January.
  54. Wooldridge, Jeffrey M., 1997. "Multiplicative Panel Data Models Without the Strict Exogeneity Assumption," Econometric Theory, Cambridge University Press, vol. 13(05), pages 667-678, October.
  55. Aghion, Philippe, et al, 2001. "Competition, Imitation and Growth with Step-by-Step Innovation," Review of Economic Studies, Wiley Blackwell, vol. 68(3), pages 467-92, July.
  56. Paroma Sanyal & Linda R. Cohen, 2009. "Powering Progress: Restructuring, Competition, and R&D in the U.S. Electric Utility Industry," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 41-80.
  57. Nemet, Gregory F., 2006. "Beyond the learning curve: factors influencing cost reductions in photovoltaics," Energy Policy, Elsevier, vol. 34(17), pages 3218-3232, November.
  58. Dietmar Harhoff & Francis Narin & F. M. Scherer & Katrin Vopel, 1999. "Citation Frequency And The Value Of Patented Inventions," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 511-515, August.
  59. Paroma Sanyal, 2007. "The effect of deregulation on environmental research by electric utilities," Journal of Regulatory Economics, Springer, vol. 31(3), pages 335-353, June.
  60. Congleton, Roger D, 1992. "Political Institutions and Pollution Control," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 412-21, August.
  61. repec:fth:harver:1473 is not listed on IDEAS
  62. David Popp, 2006. "They Don'T Invent Them Like They Used To: An Examination Of Energy Patent Citations Over Time," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(8), pages 753-776.
  63. Spence, Michael, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Wiley Blackwell, vol. 43(2), pages 217-35, June.
  64. Jacobsson, Staffan & Bergek, Anna & Finon, Dominique & Lauber, Volkmar & Mitchell, Catherine & Toke, David & Verbruggen, Aviel, 2009. "EU renewable energy support policy: Faith or facts?," Energy Policy, Elsevier, vol. 37(6), pages 2143-2146, June.
  65. Markard, Jochen & Truffer, Bernhard, 2006. "Innovation processes in large technical systems: Market liberalization as a driver for radical change?," Research Policy, Elsevier, vol. 35(5), pages 609-625, June.
  66. Harris, Christopher & Howitt, Peter & Vickers, John & Aghion, Philippe, 2001. "Competition, Imitation and Growth with Step-by-Step Innovation," Scholarly Articles 12375013, Harvard University Department of Economics.
  67. Jamasb, T. & Pollitt, M., 2005. "Deregulation and R&D in Network Industries: The Case of the Electricity Industry," Cambridge Working Papers in Economics 0533, Faculty of Economics, University of Cambridge.
  68. Esty, Daniel C. & Porter, Michael E., 2005. "National environmental performance: an empirical analysis of policy results and determinants," Environment and Development Economics, Cambridge University Press, vol. 10(04), pages 381-389, August.
  69. Stenzel, Till & Frenzel, Alexander, 2008. "Regulating technological change--The strategic reactions of utility companies towards subsidy policies in the German, Spanish and UK electricity markets," Energy Policy, Elsevier, vol. 36(7), pages 2645-2657, July.
  70. Hélène Dernis & Mosahid Khan, 2004. "Triadic Patent Families Methodology," OECD Science, Technology and Industry Working Papers 2004/2, OECD Publishing.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:67:y:2014:i:3:p:396-411. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.