Green National Innovative Capacity : An empirical study of the determinants of patenting in technologies related to renewable energy sources

Abstract: Climate change constitutes a major threat to our planet. Finding and developing new technologies that can utilize renewable sources of energy is an essential component in combating this threat. The concerns are global, and today there is large variation in innovation intensity across advanced countries. Motivated by these differences, this thesis provides an empirical investigation of the determinants of country-level production of patents related to renewable energy generation. The investigation examines the impact of public environmental policy by assessing the effect of policy stringency and environmental taxes on renewable patents. Green innovative capacity is not separated from general innovative capacity. Drawing from the concept of national innovation system we therefore identify country-specific factors of innovation and examine to what extent they can be translated to the domain of environmental technology. We construct a panel of 22 OECD countries over the years 1994-2015 and analyze how governmental R&D expenditures, how different macroeconomic and institutional factors, as well as how environmental policy stimulate innovative activities. We analyze these factors using regression analysis and we use two count data models, namely the Poisson model and the Negative Binomial model. Our findings suggest that public policy is important for inducing innovation, both by deciding the level of R&D resources available to the economy and the level of environmental taxes. Furthermore, our thesis provides evidence that certain determining factors of general innovative performance also affect countries’ innovative capacity in green technologies.