Influence of Oil Prices on Innovation in Renewable Energy Sector

In this study, oil prices? impact on innovation in renewable energy sectoris analyzed. Using correlation-regression analysis, yearly average oil prices are taken as independent variables and patent counts as dependent variables. Patent counts act as proxy and indicator of innovation. For finding the consequent reaction and relationship, independent variables are lagged by one and two years. The study covers 1982-2010 period. Patent data is got from PATSTAT database for patents of European Patent Office (EPO).For the years of 1982 ? 2010, firms that have applied to at least one solar (photovoltaic) patent are chosen for dataset. According to the analysis, oil prices have positive impact on innovation in renewable energy. In one year and two years periods companies? reaction regarding renewable energy innovation to oil prices are positively correlated, but in one year period this effect is greater.