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The impact of oil shocks on innovation for alternative sources of energy: Is there an asymmetric response when oil prices go up or down?

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  • Nunes, Inês Carrilho
  • Catalão-Lopes, Margarida

Abstract

Do lower oil prices translate into less innovation more than higher oil prices translate into more innovation? Is a long-run sustainability transition taking place or are countries just encouraging innovation in alternative energies in a short-run approach, given the conditions of fossil fuel markets? In this paper we apply negative binomial regression to a panel data set of the 10 most innovative countries concerning alternative energy technologies, in order to assess the impact of oil price variations on this innovation, using counts of patent applications as a proxy. The data includes the declining prices period after 2014. The results show that the impact of oil prices on patent applications for alternative energies is asymmetric: when prices are decreasing the reduction in innovation is more pronounced than the expansion when prices are rising. This result may denote some absence of commitment to find sustainable alternatives to the use of fossil fuels.

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  • Nunes, Inês Carrilho & Catalão-Lopes, Margarida, 2020. "The impact of oil shocks on innovation for alternative sources of energy: Is there an asymmetric response when oil prices go up or down?," Journal of Commodity Markets, Elsevier, vol. 19(C).
    • Handle: RePEc:eee:jocoma:v:19:y:2020:i:c:s240585131930073x
    DOI: 10.1016/j.jcomm.2019.100108
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    1. Carrilho-Nunes, Inês & Catalão-Lopes, Margarida, 2022. "The effects of environmental policy and technology transfer on GHG emissions: The case of Portugal," Structural Change and Economic Dynamics, Elsevier, vol. 61(C), pages 255-264.
    2. He, Jiaxin & Li, Jingyi & Zhao, Daiqing & Chen, Xing, 2022. "Does oil price affect corporate innovation? Evidence from new energy vehicle enterprises in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    3. Wang, Jun-Zhuo & Feng, Gen-Fu & Yin, Hua-Tang & Chang, Chun-Ping, 2023. "Toward sustainable development: Does the rising oil price stimulate innovation in climate change mitigation technologies?," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 569-583.
    4. Wu, Wenhan & Wu, Wenzhuo & Wu, Kouhua & Ding, Chen, 2022. "The nexus between green innovations and natural resources commodity prices in China," Resources Policy, Elsevier, vol. 78(C).
    5. Hu, Jinyan & Wang, Kai-Hua & Su, Chi Wei & Umar, Muhammad, 2022. "Oil price, green innovation and institutional pressure: A China's perspective," Resources Policy, Elsevier, vol. 78(C).

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