More where that came from: Induced innovation in the american oil and gas sectors

Bryce Daniels and Daniel K.N. Johnson

Resources Policy, 2019, vol. 64, issue C

Abstract: Induced innovation theory suggests that a change in relative input prices will result in a substitution effect not only toward cheaper alternatives, but toward innovative activity that will lead to new alternatives. Here we test whether the same holds true for output prices: does innovation in the oil and gas sector respond positively to a rise in energy prices? We model the share of total granted U.S. patents that are related to oil and gas as a function of expected future commodity prices, production levels of each commodity and previous innovations (or stocks of knowledge). We find a significant, positive and highly elastic correlation between expected commodity prices and innovation.

Keywords: Energy; Oil; Gas; Innovation; Induced innovation; Patent (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:64:y:2019:i:c:s0301420719303472

DOI: 10.1016/j.resourpol.2019.101451

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