Electricity (de)regulation and innovation

Marianna Marino, Pierpaolo Parrotta and Giacomo Valletta

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Abstract: In this paper we study the effect of deregulation on innovation in the electricity sector using a sample of 31 OECD countries. Exploiting sharp reductions in the level of product market regulation, explicitly linked to changes in the legal framework, we perform a difference-in-difference analysis by matching data retrieved from the OECD International Regulation, OECD Patent Grants, and UN World Development Indicators databases. Our main findings suggest that a decrease in regulation intensity, following a significant reform, has a negative impact on patents (granted by the European Patent Office). This impact appears to be mainly due to the degree of market contestability. Finally, we find evidence of an inverted U-shaped relationship between regulation and innovation. This may imply that the effect of deregulation on innovation depends on the strength of the deregulatory process.

Keywords: Product; market; regulation; Patents; Innovation; Electricity (search for similar items in EconPapers)
Date: 2019-04
Note: View the original document on HAL open archive server: https://hal.science/hal-02110526
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Citations: View citations in EconPapers (18)

Published in Research Policy, 2019, 48 (3), pp.748-758. ⟨10.1016/j.respol.2018.11.005⟩

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Journal Article: Electricity (de)regulation and innovation (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02110526

DOI: 10.1016/j.respol.2018.11.005

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