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Title:Determinants of trade with solar energy technology components: Evidence on the Porter hypothesis? PDF Logo
Authors:Groba, Felix
Issue Date:2011
Series/Report no.:Discussion Papers, German Institute for Economic Research, DIW Berlin 1163
Abstract:Studies analyzing renewable energy market development usually investigate additional capacity or investment. Characteristics, roles and determinants of cross border trade with renewable energy system components remain blurred. Environmental regulation and renewable energy policies are important in promoting renewable energy use. Yet, the effect of respective policies on determining exports remains ambiguous. The Porter hypothesis and the lead market literature argue that environmental regulation leads to a comparative export advantage. Empirical studies testing both hypotheses reach diverging conclusions and rarely focus on the renewable energy sector. Using solar energy technology components, this study adds to the literature by explaining exports of environmental technologies. The analysis uses a gravity trade model and a unique panel dataset to test the role of renewable energy policies on environmental technology exports from OECD countries and to describe structure and development of international solar energy technology component trade. The results find a rapidly growing market with trade dominated by European countries. The study supports the Porter and the lead market hypotheses as early adopters of strong renewable energy policies have gained a comparative advantage. Analyzing the importer side, the study suggests that regulatory policies and import tariffs determine export flows of solar energy technology components.
Subjects:Solar Energy Technologies
Energy Policy
Environmental Regulation and Trade
Trade Barriers
JEL:F14
F18
Q42
Q55
Q56
Document Type:Working Paper
Appears in Collections:DIW-Diskussionspapiere
Publikationen von Forscherinnen und Forschern des DIW

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