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Competitive Advantage in the Renewable Energy Industry: Evidence from a Gravity Model

Author

Listed:
  • Onno Kuik

    (IVM, VU Amsterdam)

  • Frédéric Branger

    (CIRED)

  • Philippe Quirion

    (CIRED, CNRS)

Abstract

Pioneering domestic environmental regulation may foster the creation of new eco-industries. These industries could benefit from a competitive advantage in the global market place. This article examines empirical evidence of the impact of domestic renewable energy policies on the export performance of renewable energy products (wind and solar PV). We use a gravity model of international trade with a balanced dataset of 49 (for wind) and 40 (for PV) countries covering the period 1995-2013. The stringency of renewable energy policies are proxied by installed capacities. Our econometric model shows evidence of competitive advantage positively correlated with domestic renewable energy policies, sustained in the wind industry but brief in the solar PV industry. We suggest that the reason for the dynamic difference lies in the underlying technologies involved in the two industries.

Suggested Citation

  • Onno Kuik & Frédéric Branger & Philippe Quirion, 2018. "Competitive Advantage in the Renewable Energy Industry: Evidence from a Gravity Model," Policy Papers 2018.07, FAERE - French Association of Environmental and Resource Economists.
    • Handle: RePEc:fae:ppaper:2018.07
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    Keywords

    Competitive Advantage; Gravity Model; Wind Industry; Solar PV Industry; Green Growth;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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