Trade and environmental regulation as structural drivers of innovation Theory and empirics on product, process and green patents

How do trade and environmental policies shape technological change? This dissertation provides three approaches that leverage patent data to better understand the incentives to conduct innovation, focussing on different innovation types. The first chapter investigates whether patent data can be used to distinguish product from process innovation at country–industry level. It then analyses how these types of innovation are linked to global value chain measures, such as participation and position. The second chapter extends the analysis by theoretically exploring how the formation of trade blocs affects the specialisation choices of countries. The model shows how regional integration can lead economies to focus, either, on upstream product development or, on downstream manufacturing and process innovation. Finally, the dissertation turns to environmental regulation and examines the impact of the EU Emissions Trading System on green innovation. The chapter identifies which regulated firms adjust the scale and direction of their technological efforts and assesses what kinds of green technologies are developed in response to the policy. Together, these three chapters provide empirical and theoretical insights into how global integration and environmental policy influence the development of different forms of innovation across firms, countries, and industries.