IDEAS home Printed from https://ideas.repec.org/a/sae/enejou/v30y2009i2p41-80.html
   My bibliography  Save this article

Powering Progress: Restructuring, Competition, and R&D in the U.S. Electric Utility Industry

Author

Listed:
  • Paroma Sanyal
  • Linda R. Cohen

Abstract

This paper investigates the R&D behavior of regulated firms when they transition to a competitive environment. Using data from the US electricity market from 1990-2000, we analyze how competition, institutional changes, and political constraints have contributed to the precipitous decline in R&D expenditure by regulated utilities. We find that firms reduce their R&D significantly at the very early stages of restructuring or even when they expect restructuring to occur. Once the emerging institutional structure becomes clear, R&D spending recovers but is later offset by another decline when restructuring legislation is enacted. In addition, greater competition and the nearing of such competition adversely affects research spending. In aggregate, R&D declines by 78.6 percent after electricity markets are restructured. Firm and state characteristics matter, and a majority of the research is conducted by large generation companies located in pro-research states, especially if they are part of a larger holding company. Such characteristics have a different impact on research spending in the pre- and post-restructured periods.

Suggested Citation

  • Paroma Sanyal & Linda R. Cohen, 2009. "Powering Progress: Restructuring, Competition, and R&D in the U.S. Electric Utility Industry," The Energy Journal, , vol. 30(2), pages 41-80, April.
  • Handle: RePEc:sae:enejou:v:30:y:2009:i:2:p:41-80
    DOI: 10.5547/ISSN0195-6574-EJ-Vol30-No2-3
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5547/ISSN0195-6574-EJ-Vol30-No2-3
    Download Restriction: no

    File URL: https://libkey.io/10.5547/ISSN0195-6574-EJ-Vol30-No2-3?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Vella, Francis & Verbeek, Marno, 1999. "Two-step estimation of panel data models with censored endogenous variables and selection bias," Journal of Econometrics, Elsevier, vol. 90(2), pages 239-263, June.
    2. Giovanni Dosi & Christopher Freeman & Richard Nelson & Gerarld Silverberg & Luc Soete (ed.), 1988. "Technical Change and Economic Theory," LEM Book Series, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy, number dosietal-1988, November.
    3. Paroma Sanyal, 2007. "The effect of deregulation on environmental research by electric utilities," Journal of Regulatory Economics, Springer, vol. 31(3), pages 335-353, June.
    4. Nadiri, M. Ishaq, 1979. "Contributions and Determinants of Research and Development Expenditures in the US Manufacturing Industries," Working Papers 79-16, C.V. Starr Center for Applied Economics, New York University.
    5. Edwin Mansfield & Lorne Switzer, 1985. "How Effective Are Canada's Direct Tax Incentives for R and D?," Canadian Public Policy, University of Toronto Press, vol. 11(2), pages 241-246, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Uwe Cantner & Martin Kalthaus & Matthias Menter & Pierre Mohnen, 2023. "Global knowledge flows: characteristics, determinants, and impacts," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 32(5), pages 1063-1076.
    2. Heijs, Joost, 2003. "Freerider behaviour and the public finance of R&D activities in enterprises: the case of the Spanish low interest credits for R&D," Research Policy, Elsevier, vol. 32(3), pages 445-461, March.
    3. Trottmann, Maria & Zweifel, Peter & Beck, Konstantin, 2012. "Supply-side and demand-side cost sharing in deregulated social health insurance: Which is more effective?," Journal of Health Economics, Elsevier, vol. 31(1), pages 231-242.
    4. José Monteiro-Barata, 2005. "Innovation in the Portuguese Manufacturing Industry: Analysis of a Longitudinal Company Panel," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 11(3), pages 301-314, August.
    5. Alessandro Muscio, 2007. "THE IMPACT OF ABSORPTIVE CAPACITY ON SMEs' COLLABORATION," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(8), pages 653-668.
    6. Mark Knell & Simone Vannuccini, 2022. "Tools and concepts for understanding disruptive technological change after Schumpeter," Jena Economics Research Papers 2022-005, Friedrich-Schiller-University Jena.
    7. Andre Nassif & Carmem Aparecida Feijo & Eliane Araújo, 2016. "Structural change, catching up and falling behind in the BRICS: A comparative analysis based on trade pattern and Thirlwall’s Law," PSL Quarterly Review, Economia civile, vol. 69(279), pages 373-421.
    8. Ajay Thutupalli & Michiko Iizuka, 2016. "Catching-up in agricultural innovation: the case of Bacillus thuringiensis cotton in India," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(6), pages 923-940.
    9. Jaewon Lim & Changkeun Lee & Euijune Kim, 2015. "Contributions of human capital investment policy to regional economic growth: an interregional CGE model approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(2), pages 269-287, December.
    10. André Lorentz & Maria Savona, 2009. "Evolutionary micro-dynamics and changes in the economic structure," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 137-160, Springer.
    11. Vialle, Pierre & Song, Junjie & Zhang, Jian, 2012. "Competing with dominant global standards in a catching-up context. The case of mobile standards in China," Telecommunications Policy, Elsevier, vol. 36(10), pages 832-846.
    12. Jeffrey T. Macher & Barak D. Richman, 2004. "Organisational Responses To Discontinuous Innovation: A Case Study Approach," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 87-114.
    13. Fernando Botelho & Vladimir Ponczek, 2011. "Segmentation in the Brazilian Labor Market," Economic Development and Cultural Change, University of Chicago Press, vol. 59(2), pages 437-463.
    14. Rossana Galli, 1997. "Is There Long Run Industrial Convergence in Europe?," International Review of Applied Economics, Taylor & Francis Journals, vol. 11(3), pages 333-368.
    15. Flemming Sørensen & Jan Mattsson, 2016. "Speeding Up Innovation: Building Network Structures For Parallel Innovation," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 1-30, February.
    16. Anna Kadeřábková, 2003. "Struktura a výkonnost technologicky náročného obchodu kandidátských zemí [Structure and performance of technology intensive trade]," Politická ekonomie, Prague University of Economics and Business, vol. 2003(2), pages 173-195.
    17. Hugo Benítez-Silva & Debra S. Dwyer, 2003. "What to Expect when you are Expecting Rationality: Testing Rational Expectations using Micro Data," Working Papers wp037, University of Michigan, Michigan Retirement Research Center.
    18. Jeroen van den Bergh & John Gowdy, 2000. "Evolutionary Theories in Environmental and Resource Economics: Approaches and Applications," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 17(1), pages 37-57, September.
    19. Bazhal, Iurii, 2014. "Industrial policy under Neo-Schumpeterian concept of structural technological dynamics: Case of Ukraine," MPRA Paper 67434, University Library of Munich, Germany, revised 24 Oct 2015.
    20. Zhice Cheng & Xinyuan Chen & Huwei Wen, 2022. "How Does Environmental Protection Tax Affect Corporate Environmental Investment? Evidence from Chinese Listed Enterprises," Sustainability, MDPI, vol. 14(5), pages 1-22, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:enejou:v:30:y:2009:i:2:p:41-80. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.