Price- and Policy-Induced Innovations: The Case of U.S. Biofuel

• Main Authors: Heesun Jang, Xiaodong Du
• Format: Article
• Language: English
• Published: Western Agricultural Economics Association 2013-12-01
• Series: Journal of Agricultural and Resource Economics
• Subjects: knowledge stock; patent count and citation; r&d expenditures
• Online Access: https://ageconsearch.umn.edu/record/165929

Using patent counts and citation data from 1977 to 2011, we explore the determining factors of innovative activities of the U.S. biofuel industry. We take into account both demand-side factorsÑ such as crude-oil price, government R&D expenditure on biofuel, and federal-level support policiesÑand supply-side factors, represented by constructed knowledge stocks, to quantify the effects on biofuel-related innovations. The citation generation process is quantified using patent citation records and the estimates are used to construct the simple and weighted stocks of knowledge with weights of patent productivity. We confirm that both the demand and supply factors have positive and statistically significant effects on technological biofuel innovations in the United States.