Clean and Dirty International Technology Diffusion

Valentina Bosetti and Elena Verdolini

No 2013.43, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper investigates the role of Intellectual Property Rights (IPR) protection and Environmental Policies (EPs) on clean (renewable) and dirty (fossil-based) technology diffusion from top-innovators. IPR protection and EPs are extensively debated policy tools, as IPR protection addresses knowledge market failure, while EPs respond to pressing local and global environmental externalities. A model of monopolistic competition inspired by the recent trade literature shows that the profits associated with exporting a blueprint are a function of the quality of the idea and of market and institutional characteristics of the receiving country. We test the empirical implications of our model using patent data in renewable and fossil efficient power technologies for 13 top innovating countries and 40 patenting authorities. We improve on previous contributions by accounting for unobserved heterogeneity and for the endogeneity of policy proxies through a Generalized Method of Moment estimator. We show that knowledge transfer through patent duplication increases with the level of IPR protection, but with slight diminishing marginal returns. The effect is stronger for clean technologies, which are arguably less mature and more sensitive to uncertainty. Commitment to EPs also increases the incentives for patent duplication. The magnitude of the effect is conditional on the nature of the technology and on the specific policy instrument.

Keywords: Technology Diffusion and Transfer; Innovation; Patents; Energy Technologies; Environmental Policy; Intellectual Property Rights (search for similar items in EconPapers)
JEL-codes: O33 O34 Q55 (search for similar items in EconPapers)
Date: 2013-05
New Economics Papers: this item is included in nep-env, nep-ino, nep-ipr, nep-pr~ and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Working Paper: Clean and Dirty International Technology Diffusion (2013)
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