The Impact of Energy Prices on Green Innovation

KOF Working Papers No. 340

49 Pages Posted: 7 Aug 2013

See all articles by Marius Christian Ley

Marius Christian Ley

affiliation not provided to SSRN

Tobias Stucki

ETH Zürich - Swiss Institute for Business Cycle Research

Martin Woerter

Swiss Federal Institute of Technology Zurich (ETH) - Swiss Institute for Business Cycle Research (KOF)

Date Written: August 6, 2013

Abstract

Based on patent data and industry specific energy prices for 18 OECD countries over 30 years we investigate on an industry level the impact of energy prices on green innovation activities. Our econometric models show that energy prices and green innovation activities are positively related and that energy prices have a significantly positive impact on the share of green innovations in non-green innovations. More concretely, our main model shows that a 10% increase of the average energy prices of the previous five years results in a 2.7% and 4.5% increase of the number of green innovations and the share of green innovations in non-green innovations, respectively. We also find that the impact of energy prices increases with an increasing lag between energy prices and innovation activities. Robustness tests confirm the main results.

Keywords: innovation, environment, energy prices

JEL Classification: O30, O34, Q55

Suggested Citation

Ley, Marius Christian and Stucki, Tobias and Woerter, Martin, The Impact of Energy Prices on Green Innovation (August 6, 2013). KOF Working Papers No. 340, Available at SSRN: https://ssrn.com/abstract=2306534 or http://dx.doi.org/10.2139/ssrn.2306534

Marius Christian Ley

affiliation not provided to SSRN

Tobias Stucki

ETH Zürich - Swiss Institute for Business Cycle Research ( email )

Weinbergstrasse 35
ETH Zentrum
Zurich 8092, 8092
Switzerland

Martin Woerter (Contact Author)

Swiss Federal Institute of Technology Zurich (ETH) - Swiss Institute for Business Cycle Research (KOF) ( email )

CH-8092 Zurich
Switzerland

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