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Lu, Yanpin, 2011. Induced innovation and relavtive factor share. Second cycle, A2E. Uppsala: SLU, Dept. of Economics



We build up an induced innovation model based on Popp's article in AER, 2002. His model measured the effect of energy prices on energy-efficient innovations. Using the relative factor shares of energy and labor instead of the energy prices per se, we are able to explain the patenting activity in a better way. Also, with the combination of theoretical and empirical research, we can prove that technological change of energy is related with prices and quantities of both energy factor and labor factor. Furthermore, we discuss on the possibility of the hypothesis of diminishing returns to knowledge, which reveals that diminishing returns are not necessary to exist in the induced innovation model. The result we got is not very strong but it shows more elasticity than Popp’s model.

Main title:Induced innovation and relavtive factor share
Authors:Lu, Yanpin
Supervisor:Hart, Rob
Examiner:Surry, Yves
Series:Degree thesis / SLU, Department of Economics
Volume/Sequential designation:695
Year of Publication:2011
Level and depth descriptor:Second cycle, A2E
Student's programme affiliation:NM002 Agricultural Economics and Management - Master's Programme 120 HEC
Supervising department:(NL, NJ) > Dept. of Economics
Keywords:induced innovation, relative factor share, energy price, diminishing returns to knowledge, patent citations
Permanent URL:
Subject. Use of subject categories until 2023-04-30.:Energy resources management
Economics and management
Deposited On:22 Sep 2011 07:25
Metadata Last Modified:20 Apr 2012 14:22

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