Determinants of Trade with Solar Energy Technology Components: Evidence on the Porter Hypothesis?

Felix Groba ()

No 1163, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: Studies analyzing renewable energy market development usually investigate additional capacity or investment. Characteristics, roles and determinants of cross border trade with renewable energy system components remain blurred. Environmental regulation and renewable energy policies are important in promoting renewable energy use. Yet, the effect of respective policies on determining exports remains ambiguous. The Porter hypothesis and the lead market literature argue that environmental regulation leads to a comparative export advantage. Empirical studies testing both hypotheses reach diverging conclusions and rarely focus on the renewable energy sector. Using solar energy technology components, this study adds to the literature by explaining exports of environmental technologies. The analysis uses a gravity trade model and a unique panel dataset to test the role of renewable energy policies on environmental technology exports from OECD countries and to describe structure and development of international solar energy technology component trade. The results find a rapidly growing market with trade dominated by European countries. The study supports the Porter and the lead market hypotheses as early adopters of strong renewable energy policies have gained a comparative advantage. Analyzing the importer side, the study suggests that regulatory policies and import tariffs determine export flows of solar energy technology components.

Keywords: Solar Energy Technologies; Energy Policy; Environmental Regulation and Trade; Trade Barriers (search for similar items in EconPapers)
JEL-codes: F14 F18 Q42 Q55 Q56 (search for similar items in EconPapers)
Pages: 40 p.
Date: 2011
New Economics Papers: this item is included in nep-cis, nep-ene, nep-env, nep-int and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Journal Article: Determinants of trade with solar energy technology components: evidence on the porter hypothesis? (2014)
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