FEEM working papers "Note di lavoro" series
2014 .018

Explaining the Slow Pace of Energy Technological Innovation: Why Market Conditions Matter?


Autori: Wei Jin, ZhongXiang Zhang
Serie: Energy: Resources and Markets
Editor: Giuseppe Sammarco
Parole chiave: The Economics of Technological Innovation, Market Size Effect, Love-for-variety effect, Energy Technology, IT Technology
Numero JEL: Q55, Q58, Q43, Q48, O31

Abstract

As a useful complement to numerous innovation policy studies from a normative  perspective, this paper provides a positive framework to analyze the basic economic mechanism of energy technological innovation and explains its slow pace of technological progress. We find that the capital-intensiveness of energy technology is an inhibiting factor to catalyze market size effect and slows innovations and diffusions of energy technology in the market. We also show that the substantial homogeneity of energy products leads to both a monopolistic market structure on the supply side and a weak level of positive pecuniary externality on the demand side, both dampening the incentive of innovation. On the basis of our economic analysis, we recommend that a package of policy responses to accelerating energy innovation should include 1) downsizing “heavy” assets of energy technologies; 2) deregulating monopolistic energy-supplying markets; and 3) differentiating the homogenous energy products.

***

Suggested citation: Jin, W., Z.X. Zhang  (2014), 'Explaining the Slow Pace of Energy Technological Innovation: Why Market Conditions Matter?', Nota di Lavoro 18.2014, Milan, Italy: Fondazione Eni Enrico Mattei.

Download file
Scarica il file PDF

FEEM Newsletter

Iscriviti per rimanere aggiornato.

I Suoi dati saranno trattati dalla Fondazione Eni Enrico Mattei. – Titolare del trattamento – per ricevere via posta elettronica la newsletter della Fondazione. Il conferimento dell’indirizzo e-mail è necessario alla fornitura del servizio. La invitiamo a consultare la Privacy Policy per ottenere maggiori informazioni a tutela dei Suoi diritti.

Questo Sito utilizza cookie tecnici e analytics, nonché consente l’invio di cookie di profilazione di terze parti.
Chiudendo questo banner o comunque proseguendo la navigazione sul Sito manifesti il tuo consenso all’uso dei cookie. Per ulteriori informazioni e per esprimere scelte selettive in ordine all’uso dei cookie vedi la   Cookie PolicyOk