Journal Publications
Andres, Pia (2024): Adapting to Competition: Solar PV Innovation in Europe And the Impact of the ‘China Shock’ Environmental and Resource Economics 87 (12), 3095–3129
Abstract Low cost solar energy is key to enabling the transition away from fossil fuels. Despite this, the European Union followed the United States’ example in imposing anti-dumping tariffs on solar panel imports from China in 2012, arguing that Chinese panels were unfairly subsidised and harmed its domestic industry. This paper examines the effects of Chinese import competition on firm-level innovation in solar photovoltaic technology by European firms using a sample of 10,137 firms in 15 EU countries over the period 1999-2020.
I show that firms which were exposed to higher import competition innovated more if they had a relatively small existing stock of innovation, but less if their historical knowledge stock fell within the top 10th percentile of firms in the sample. This suggests that newer firms were more able to respond to increased competition by innovating, while firms with a large historical stock of innovation may have been locked into old technological paradigms. As firms with a smaller knowledge stock tended to innovate more overall, trade with China appears to have been beneficial in encouraging innovation among the most innovative firms. However, I also find evidence that import competition increased the probability of exit among firms in the sample.
Andres, Pia, Penny Mealy, Nils Handler, and Sam Fankhauser (2023): Stranded Nations? Transition Risks and Opportunities Towards a Clean Economy Environmental Research Letters 18 (4), 045004
Abstract The transition away from a fossil-fuel powered economy towards a cleaner production system will create winners and losers in the global trade system. We compile a list of ‘brown’ traded products whose use is highly likely to decline if the world is to mitigate climate change, and highlight which countries are most at risk of seeing their productive capabilities ‘stranded’. Using methods from economic geography and complexity, we develop novel measures of transition risk that capture the extent to which countries’ export profiles are locked-in to brown products. We show that countries exporting a high number of brown products, especially technologically sophisticated ones, could find it relatively easy to transition. Conversely, countries with exports highly concentrated in a few, low-complexity brown products have much fewer nearby diversification opportunities. Our results suggest that export complexity and diversity play a key role in determining transition risk. Path-breaking diversification strategies are needed to prevent nations from becoming stranded.
Working Papers
Carl Benedikt Frey, Giorgio Presidente, and Pia Andres (2024): Data-Biased Innovation: Directed Technological Change and the Future of Artificial Intelligence The Oxford Martin Working Paper Series on Technological and Economic Change
Abstract This paper examines how privacy regulation has shaped the trajectory of artificial intelligence (AI) innovation across jurisdictions. We construct a novel taxonomy of AI technologies based on their data intensity and analyze patent applications from 57 countries across 76 industries from 2010 to 2021. Our descriptive analysis reveals three key patterns: a substantial shift from data-saving to data-intensive AI methods over the 2010s, increasing market concentration in innovation among established firms, and pronounced geographic heterogeneity in both innovation output and technological focus around the world. Exploiting variation in firms’ exposure to the European Union’s General Data Protection Regulation (GDPR), we find that exposed applicants significantly altered their technological trajectories. Applicants with greater exposure to EU markets increased their data-saving patents while decreasing data-intensive ones relative to the pre-GDPR period. This effect is driven primarily by EU-based firms. Additionally, the GDPR appears to have reduced overall AI patenting in the EU while reinforcing the market dominance of established companies.
Andres, Pia (2024): Industrial Policy and Global Public Goods Provision: Rethinking the Environmental Trade Agreement Centre for Climate Change Economics and Policy Working Paper 413/Grantham Research Institute on Climate Change and the Environment Working Paper 388. London: London School of Economics and Political Science1
Abstract Countries around the world use anti-dumping duties, local content requirements and other protectionist measures to promote their low carbon industries, thereby inflating downstream costs. At the same time, they ascribe insufficient climate action to the economic burden of mitigation efforts. This paper examines the trade-off between temporarily forgoing gains from trade by protecting an infant industry and increasing future gains through fiercer global competition later on. I introduce a strategic model featuring two countries, two time periods, and trade in a clean technology in a set up with differential production costs and imperfect competition. The findings suggest that when initial differences in production cost surpass a critical threshold, and learning-by-doing facilitates catch-up for the laggard, opting for autarky during Stage 1 can enhance overall welfare for both countries. This result is strengthened when both countries use consumer subsidies. Furthermore, when both consumer and producer subsidies are available, the Subgame Perfect Nash Equilibrium involves both trade and production subsidies on the part of the laggard country and the same welfare payoffs as perfect competition. The analysis suggests that an environmental trade agreement is most likely to be beneficial if production subsidies for clean technology are permitted.
- First published January 2023, updated in September 2024 ↩︎
Andres, Pia, Eugenie Dugoua, and Marion Dumas (2022): Directed Technological Change and General Purpose Technologies: Can AI Accelerate Clean Energy Innovation? Centre for Climate Change Economics and Policy Working Paper 403/Grantham Research Institute on Climate Change and the Environment Working Paper 378. London: London School of Economics and Political Science
Abstract Transitioning away from dirty and towards clean technologies is critical to reduce carbon emissions, but the race between clean and dirty technologies is taking place against the backdrop of improvements in general-purpose technologies (GPT) such as information and communication technologies (ICT) and artificial intelligence (AI). We show how, in theory, a GPT can affect the direction of technological change and, in particular, the competition between clean and dirty technologies. Second, we use patent data to show that clean technologies absorb more spillovers from AI and ICT than dirty technologies and that energy patenting firms with higher AI knowledge stocks are more likely to absorb AI spillovers for their energy inventions. We conclude that ICT and AI have the potential to accelerate clean energy innovation.
Pia Andres 