Uncertainty and innovation in renewable energy

Luca Bettarelli, Davide Furceri, Pietro Pizzuto and Nadia Shakoor

Journal of International Money and Finance, 2024, vol. 149, issue C

Abstract: This paper empirically investigates the impact of economic and policy uncertainty on green innovation for a sample of 81 advanced and emerging market economies during the period 1976–2020. Our results show that increases in uncertainty lead to a long-lasting decrease in green innovation, measured by the number of new green energy patents. This effect holds for a wide set of technologies, it is larger during recessions and periods of higher financial stress, and in countries with less stringent environment protection regulations. Importantly, the effect of uncertainty on green patents is larger than on non-green patents. Results are robust to several sensitivity tests, including an instrumental variable approach and a difference-in-differences strategy.

Keywords: Green patents; WUI; Uncertainty; Innovation (search for similar items in EconPapers)
JEL-codes: E0 O31 O32 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:149:y:2024:i:c:s026156062400189x

DOI: 10.1016/j.jimonfin.2024.103202

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