Seminars

◈ 주   제 : The Shale Boom and Green Innovation:Impact of Low Energy Prices on Corporate Patents
◈ 발표자 : 한진수(KAIST)
◈ 일   시 : 2024년 4월 3일 수요일 16:30 ~ 17:45
◈ 장   소 : 우석경제관(223동) 308호
◈ 주   관 : 경제학부, 경제연구소 한국경제혁신센터, SSK, BK21

The Shale Boom and Green Innovation:Impact of Low Energy Prices on Corporate Patents

Abstract:

The U.S. shale revolution has led to a glut of oil and natural gas, reshaping firms’ incentives to invest in innovation for green technology. Drawing upon a stylized economic model of green innovation based on a CES production function, this study examines the spillover impact of the shale boom on non-energy companies’ green innovation geared toward sustainable production and operations. Exploiting differential exposure to the U.S. shale boom across states as a natural experiment, we show that the level of green patents across non-energy firms located in shale-booming states has decreased after the shale development started, especially for production and processing of goods (i.e., green production innovation). The shale boom-led reduction in green production innovation is more salient for energy-intensive firms that rely more on oil and natural gas in their production process. Consistent with our theoretical prediction, we also present suggestive evidence that lower fossil fuel prices increase industrial energy use and contract corporate innovation efforts for green production as firms substitute green technology with fossil fuel-powered alternatives. However, non-production-oriented green innovation—transportation and infrastructure—is found to be less responsive to the shale boom than production-related green innovation. While the shale boom has brought economic prosperity across the country, our findings report its unexpected consequences of dwarfing technological innovation that can combat climate change.