Industrial Policies and Innovation: Evidence from the Global Automobile Industry

Panle Barwick, Hyuk-soo Kwon, Shanjun Li, Yucheng Wang and Nahim Bin Zahur

No 19660, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This paper examines the impact of industrial policies (IPs) on innovation in the global automobile industry. We compile the first comprehensive dataset linking global IPs with patent data related to the auto industry from 2008 to 2023. We document a major shift in policy focus: by 2022, nearly half of all IPs targeted electric vehicles (EV)-related sectors, up from almost none in 2008. In the meantime, there has been a clear technological transition from internal combustion engine (GV) technologies to EV innovations. Our analysis finds a positive relationship between policy support and innovation activity. At the country level, a one-standard-deviation increase in five-year cumulative EV-targeted IPs is associated with a four-percent rise in new EV patent applications. Firm-level analyses (using OLS, IV, and PPML) indicate that a ten-percent increase in EV financial incentives received by automakers and EV battery producers leads to a similar four-percent increase in EV innovations. We confirm the importance of path dependence in the direction of technology change in the automobile industry but find no evidence that EV-targeted IPs stimulate innovation in GV technologies.

Keywords: Innovation; Patent (search for similar items in EconPapers)
JEL-codes: L52 L62 O31 Q48 (search for similar items in EconPapers)
Date: 2024-11
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP19660 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:19660

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP19660

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().