Abstract
Innovation and diffusion of renewable energy technologies is critical to meeting the demands of climate and environmental policies. An emerging body of literature shows that innovators respond to aggregate global demands for climate change mitigation technologies. Indeed, innovation and trade in renewable energy technologies has accelerated as countries throughout the globe have introduced more stringent environmental regulations to confront the climate crisis. Yet most of this research, while it does consider trade and competitiveness, fails to explicitly incorporate the foreign demand inducement effect—that is, foreign climate and environmental policies can induce innovation from innovators in other countries. In this study, we argue that trade acts as an important channel whereby foreign environmental regulatory stringency signals are conveyed to induce domestic renewable energy innovation. Based on a sample of 32 countries over 16 years, we find strong empirical evidence that foreign environmental regulations, weighted by bilateral trade, have significant innovation inducement effects across borders. Hence, our findings fill a critical gap in the literature by empirically exploring the interplay of green industrial policy, global political economy, trade, innovation, and development.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.