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Energizing Change: How Policies and Experience Drive Research and Development

Author

Listed:
  • Nilanjana Dutt

    (Department of Management and Technology and ICRIOS, Bocconi University, 20136 Milan, Italy)

  • Colleen Cunningham

    (David Eccles School of Business, University of Utah, Salt Lake City, Utah 84112)

Abstract

Given the significance of firm research and development (R&D) investment in supporting successful technological shifts, this paper asks whether policy incentives can drive firms to invest in R&D. We use data from the U.S. electric utilities industry, a setting in which most state governments have enacted renewable portfolio standards (RPSs) mandating renewable electricity. We examine whether these policies also motivate firms to increase investment in R&D. We find a positive relationship between RPSs and R&D investment but primarily among firms with previous experience generating renewable electricity. Notably, electric utility firms focus their investments on external R&D rather than on internal R&D projects. By highlighting how policy incentives for technological change and firm technological experience work together to stimulate R&D efforts, this research deepens our understanding of technological search.

Suggested Citation

  • Nilanjana Dutt & Colleen Cunningham, 2025. "Energizing Change: How Policies and Experience Drive Research and Development," Strategy Science, INFORMS, vol. 10(4), pages 371-387, December.
    • Handle: RePEc:inm:orstsc:v:10:y:2025:i:4:p:371-387
    DOI: 10.1287/stsc.2024.0196
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