AbstractInnovation by energy firms is critical for facing the energy transition and the challenge of climate change. Innovation is a complex process, and firms increasingly resort to cooperation with other companies and institutions in their innovation activities. In the energy sector, suppliers have always played a very important role in the technological advances of this industry. The objective of this paper is to analyse the determinants for engagement in cooperation in innovation by energy firms. In this analysis, we distinguish by the type of partnership, whether suppliers or research organisations (universities and research centres). We consider the factors proposed by the industrial organisation literature and the reasons given for firms to innovate, to explain decisions to cooperate. For the empirical analysis, we use a sample of energy firms from the Spanish Technological Innovation Panel (PITEC) for the period 2004–2016. To carry out the estimations we use binary models for panel data. In order to correct for endogeneity of the relevant variables, some of which are binary, we have relied on the panel data version of the special regressor method. Our results show the important role of incoming spillovers and innovation objectives related to reducing the environmental impact and meeting environmental regulatory requirements to explain cooperation in innovation by energy firms.
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