Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/335189 
Year of Publication: 
2025
Series/Report no.: 
ECONtribute Discussion Paper No. 380
Publisher: 
University of Bonn and University of Cologne, Reinhard Selten Institute (RSI), Bonn and Cologne
Abstract: 
We show that personal experiences affect high-stakes economic decisions among inventors. Using matched patent and survey data from French and German inventors linked to natural disaster records, we exploit exogenous variation in disaster exposure. Inventors personally affected by natural disasters subsequently produce 8.2% more green patents, primarily driven by emission-reducing mitigation technologies, while non-green innovation remains unaffected. The absence of sizable spatial spillovers highlights the importance of personal experience. Disaster exposure shapes innovation choices by altering profitability expectations through shifting higher-order beliefs about consumer demand and anticipated regulation. Embedding this channel in a formal model, we disentangle the role of expectations and intrinsic motivation. The model predicts, and the data confirm, that effects are strongest in competitive markets, where profit incentives matter most.
Subjects: 
Inventors
Personal Experiences
Green Innovation
Expectation Formation
Natural Disasters
JEL: 
D84
D9
O31
O34
Q54
Q55
Additional Information: 
Previously circulated under the title "The Effects of Natural Disasters on Green Innovation."
Document Type: 
Working Paper

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