Resources Science ›› 2019, Vol. 41 ›› Issue (7): 1306-1316.doi: 10.18402/resci.2019.07.11

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Impact of government policy and market competition on renewable energy innovation in EU countries

Yang LI()   

  1. Department of Economics, Party School of Guangzhou Municipal Committee of the Communist Party of China, Guangzhou 510070, China
  • Received:2018-10-12 Revised:2019-01-16 Online:2019-07-25 Published:2019-07-25


Renewable energy technological innovation plays a key role in coping with climate change and promoting energy transformation. The report of the 19th National Congress of China proposes to build a market-oriented green technology innovation system. To examine whether market force can promote renewable energy technological innovation more effectively than government policy, we made an empirical analysis by linear and nonlinear, static and dynamic panel empirical methods based on transnational panel data of the European Union, which is the world leader in renewable energy technology, environmental policy implementation, and energy market liberation. The results show that: (1) On the whole, both government environmental policy and market competition have a positive impact on renewable energy patents, that is, they have significant inducing effects on renewable energy technological innovation. (2) Both government environmental policy and market competition have significant non-linear threshold effect on renewable energy patents. With the increasing intensity of the government’s environmental policy, its positive impact on renewable energy technological innovation gradually decreases, that is, the inducing effect of policy is limited. With the deepening of energy market competition, the positive impact of market competition on renewable energy technological innovation increases, that is, market competition is effective and continuous in inducing renewable energy technological innovation. (3) By comparing the current situation and threshold values, we found that the majority of countries have crossed the threshold. That is, environmental policy intensity is too high, but market competition is in the appropriate threshold regime. (4) By examining renewable energy policy, we found that the impacts of different renewable energy policies on renewable energy technological innovation are heterogeneous. The results can provide some policy basis for China to achieve energy transformation, deepen the reform of electric power system, and establish a unified green certificate trading system of renewable energy.

Key words: technological innovation, policy, market competition, renewable energy, threshold effect, European Union