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Does foreign environmental policy influence domestic innovation?: evidence from the wind industry

Listed author(s):
  • Antoine Dechezlepretre
  • Matthieu Glachant

This paper analyses the relative influence of domestic and foreign demand-pull policies in wind power across OECD countries on the rate of innovation in this technology. We use annual wind power generation to capture the stringency of the portfolio of demand-pull policies in place (e.g., guaranteed tariffs, investment and production tax credits), and patent data as an indicator of innovation activity. We find that wind technology improvements respond positively to policies both home and abroad, but the marginal effect of domestic policies is 12 times greater. The influence of foreign polices is reduced by barriers to technology diffusion, in particular lax intellectual property rights. Reducing such barriers therefore constitutes a powerful policy leverage for boosting environmental innovation globally.

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File URL: http://eprints.lse.ac.uk/58155/
File Function: Open access version.
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Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 58155.

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Date of creation: Jun 2014
Publication status: Published in Environmental and Resource Economics, June, 2014, 58(3), pp. 391-413. ISSN: 0924-6460
Handle: RePEc:ehl:lserod:58155
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