Policy-Induced Innovation in Clean Technologies: Evidence from the Car Market

Rik L. Rozendaal, Herman R.J. Vollebergh and Rik Rozendaal
Authors registered in the RePEc Author Service: Rik Rozendaal

No 9422, CESifo Working Paper Series from CESifo

Abstract: This article tests the effects of fuel economy and greenhouse gas emission standards on the direction of innovation, in particular on breakthrough technologies in the automotive industry. We develop an intuitive measure of standard stringency that captures the policy’s most important features for the decision as to whether or not to innovate. To test the role of these standards relative to prices and taxes, we construct a firm-level panel of patents in clean and dirty automotive technologies for the years 2000-2016. Our results indicate that standards are a very robust driver inducing clean innovation, whereas taxes also seem to play a role but prices (net of taxes) do not. This effect is driven by patenting for breakthrough technologies, in particular electric vehicle and hydrogen fuel cell technologies. We find no evidence that these policies negatively impact dirty innovation.

Keywords: environmental policy instruments; regulatory stringency; innovation; directed technical change (search for similar items in EconPapers)
JEL-codes: O30 Q55 Q58 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ene, nep-env, nep-ino, nep-sbm, nep-tid and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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