 Powering Progress: Restructuring, Competition, and R&D in the U.S. Electric Utility IndustryParoma Sanyal and Linda R. Cohen The Energy Journal, 2009, vol. 30, issue 2, 41-80 Abstract: This paper investigates the R&D behavior of regulated firms when they transition to a competitive environment. Using data from the US electricity market from 1990-2000, we analyze how competition, institutional changes, and political constraints have contributed to the precipitous decline in R&D expenditure by regulated utilities. We find that firms reduce their R&D significantly at the very early stages of restructuring or even when they expect restructuring to occur. Once the emerging institutional structure becomes clear, R&D spending recovers but is later offset by another decline when restructuring legislation is enacted. In addition, greater competition and the nearing of such competition adversely affects research spending. In aggregate, R&D declines by 78.6 percent after electricity markets are restructured. Firm and state characteristics matter, and a majority of the research is conducted by large generation companies located in pro-research states, especially if they are part of a larger holding company. Such characteristics have a different impact on research spending in the pre- and post-restructured periods. Keywords: R&D; Regulation; competition; electricity restructuring; electric utilities; US (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:30:y:2009:i:2:p:41-80 DOI: 10.5547/ISSN0195-6574-EJ-Vol30-No2-3 Access Statistics for this article More articles in The Energy Journal |
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