This study analyzes effects of R&D investment and technology development performance as two main policy variables towards the expansion of renewable energy dissemination among 18 OECD countries using panel econometric model.
This study chooses ann...
This study analyzes effects of R&D investment and technology development performance as two main policy variables towards the expansion of renewable energy dissemination among 18 OECD countries using panel econometric model.
This study chooses annual R&D expenditure and number of US patents in the area of renewable energy, solar and wind as the policy variables to represent input and output of a country’s R&D activities. This study also chooses annual renewable electricity generation to represent true output. We used annual data from 1990 to 2015 of 18 OECD countries for all analyses in this study.
This study first analyses two policy variables separately. Uni-variate analyses were conducted on the number of US patents and on the amount of R&D expenditures, respectively. Then we put two policy variables together with six control variables to formulate this study’s estimation model. Second, we do international comparison especially among best counties and Korea to find Korea’s position among the elite.
Estimation results show that both policy variables have highly positive effects on renewable electricity generation and are all statistically significant across the 18 countries. We find that the estimation coefficients of the number of US patents are greater than those of the R&D budget, confirming that the patents, the result of technology development activities, have more direct link to the expansion for renewable energy dissemination. In addition, we find that a fixed-effects model is more efficient by the Hausman test. Also we find that the size and sign of the coefficients remain constant with different sets of control variables in the model, confirming that the estimation model of this study is solid and stable. Also, we find no significant multicollinearity between the two policy variables.
Denmark, Germany, and the United Kingdom, which show the highest effect among the 18 OECD countries analyzed. However, Korea shows below-average coefficient values in both policy variables, indicating that the relation between R&D policy and renewable energy dissemination policy is still at a low level. This results imply the need for detailed analysis on the technology development policies and renewable energy policies of countries with excellent effects.