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R&D, Patenting and Market Regulation: Evidence from EU Electricity industry

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  • Carlo Cambini
  • Federico Caviggioli
  • Giuseppe Scellato

Abstract

In this paper we study the effects of the changes in the level of product market regulation on the industry-level innovation intensity in the Electricity sector across 16 European countries during years 1990-2009. We matched data on R&D budgets and EPO patent applications from IEA and Eurostat Databases and indexes of market regulation conditions from OECD, in order to test the impact of deregulatory policies on the propensity to innovate in new energy technologies. Our findings indicate an increase in the aggregated Electricity R&D and in patenting activities following market deregulation. Our measure of market regulation intensity is based on the aggregation of three factors that capture respectively entry barriers, public ownership and vertical integration. Econometric results suggest that policies aimed at a reduction in vertical integration have a positive impact on both industry-level R&D and patenting. The reduction of public ownership of incumbent operators and entry barriers are mostly associated to a significant increase in R&D expenditures. In the paper we discuss the implication of this evidence in light of the current trend in investment in the electricity sector in Europe.

Suggested Citation

  • Carlo Cambini & Federico Caviggioli & Giuseppe Scellato, 2015. "R&D, Patenting and Market Regulation: Evidence from EU Electricity industry," IEFE Working Papers 78, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    • Handle: RePEc:bcu:iefewp:iefewp78
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    Keywords

    Innovation; Patents; Regulation; Electricity.;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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