“Salvation and Profit”: Deconstructing the Clean-Tech Bubble

Vincent Giorgis, Tobias Huber and Didier Sornette
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Vincent Giorgis: ETH Zürich
Tobias Huber: ETH Zürich
Didier Sornette: ETH Zürich - Department of Management, Technology, and Economics (D-MTEC); Swiss Finance Institute; Southern University of Science and Technology; Tokyo Institute of Technology

No 21-36, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: From 2004 to 2008, a bubble formed in clean technologies, such as solar, biofuels, batteries, and other renewable energy sources. In this paper, we analyze this clean-tech bubble through the lens of the Social Bubble Hypothesis, which holds that strong social interactions between enthusiastic supporters weave a network of reinforcing feedbacks that lead to widespread endorsement and extraordinary commitment by those involved. We present a detailed synthesis of the development of the clean-tech bubble, its history, and the role of venture capital and government funding in catalyzing it. In particular, we dissect the underlying narrative that was fueling the bubble. As bubbles can be essential in the process of accelerating the development of emerging technologies and diffusion of technological innovations, we present evidence that the clean-tech bubble constituted an example of an innovation-accelerating process.

Keywords: Financial Bubbles; Narrative Economics; Technological Innovation; Clean Tech; Energy; Venture Capital (search for similar items in EconPapers)
JEL-codes: C54 D61 D70 F64 G01 O25 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2021-05
New Economics Papers: this item is included in nep-ene, nep-fdg, nep-hme, nep-ino and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2136

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