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Uncertainty and innovation in renewable energy

Author

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  • Bettarelli, Luca
  • Furceri, Davide
  • Pizzuto, Pietro
  • Shakoor, Nadia

Abstract

This paper empirically investigates the impact of economic and policy uncertainty on green innovation for a sample of 81 advanced and emerging market economies during the period 1976–2020. Our results show that increases in uncertainty lead to a long-lasting decrease in green innovation, measured by the number of new green energy patents. This effect holds for a wide set of technologies, it is larger during recessions and periods of higher financial stress, and in countries with less stringent environment protection regulations. Importantly, the effect of uncertainty on green patents is larger than on non-green patents. Results are robust to several sensitivity tests, including an instrumental variable approach and a difference-in-differences strategy.

Suggested Citation

  • Bettarelli, Luca & Furceri, Davide & Pizzuto, Pietro & Shakoor, Nadia, 2024. "Uncertainty and innovation in renewable energy," Journal of International Money and Finance, Elsevier, vol. 149(C).
    • Handle: RePEc:eee:jimfin:v:149:y:2024:i:c:s026156062400189x
    DOI: 10.1016/j.jimonfin.2024.103202
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    More about this item

    Keywords

    Green patents; WUI; Uncertainty; Innovation;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • E0 - Macroeconomics and Monetary Economics - - General

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