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Electricity (de)regulation and innovation

Author

Listed:
  • Marianna Marino
  • Pierpaolo Parrotta

    (UNIL - Université de Lausanne, LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Giacomo Valletta

Abstract

In this paper we study the effect of deregulation on innovation in the electricity sector using a sample of 31 OECD countries. Exploiting sharp reductions in the level of product market regulation, explicitly linked to changes in the legal framework, we perform a difference-in-difference analysis by matching data retrieved from the OECD International Regulation, OECD Patent Grants, and UN World Development Indicators databases. Our main findings suggest that a decrease in regulation intensity, following a significant reform, has a negative impact on patents (granted by the European Patent Office). This impact appears to be mainly due to the degree of market contestability. Finally, we find evidence of an inverted U-shaped relationship between regulation and innovation. This may imply that the effect of deregulation on innovation depends on the strength of the deregulatory process.

Suggested Citation

  • Marianna Marino & Pierpaolo Parrotta & Giacomo Valletta, 2019. "Electricity (de)regulation and innovation," Post-Print hal-02110526, HAL.
  • Handle: RePEc:hal:journl:hal-02110526
    DOI: 10.1016/j.respol.2018.11.005
    Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-02110526
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    Cited by:

    1. Michael G. Pollitt, 2019. "The European Single Market in Electricity: An Economic Assessment," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(1), pages 63-87, August.
    2. Rosato, Antonello & Panella, Massimo & Andreotti, Amedeo & Mohammed, Osama A. & Araneo, Rodolfo, 2021. "Two-stage dynamic management in energy communities using a decision system based on elastic net regularization," Applied Energy, Elsevier, vol. 291(C).
    3. Michael L. Polemis & Markos Tselekounis, 2021. "Threshold effects in the regulation-innovation nexus: evidence from the telecommunications industry," Journal of Regulatory Economics, Springer, vol. 60(1), pages 74-93, August.
    4. Bhatt, Brijesh & Singh, Anoop, 2021. "Power sector reforms and technology adoption in the Indian electricity distribution sector," Energy, Elsevier, vol. 215(PA).
    5. Chen, Zhongfei & Zhang, Xiao & Chen, Fanglin, 2021. "Do carbon emission trading schemes stimulate green innovation in enterprises? Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    6. Lin, Boqiang & Wesseh, Presley K., 2020. "On the economics of carbon pricing: Insights from econometric modeling with industry-level data," Energy Economics, Elsevier, vol. 86(C).
    7. Polemis, Michael & Tselekounis, Markos, 2019. "Does deregulation drive innovation intensity? Lessons learned from the OECD telecommunications sector," MPRA Paper 92770, University Library of Munich, Germany.

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    More about this item

    Keywords

    Product market regulation Patents Innovation Electricity;

    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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