Association for Public Policy Analysis & Management

As countries confront the challenge of climate change, accelerating clean energy innovation has become an important policy objective, as evidenced by the 2015 Mission Innovation agreement to double clean energy R&D investment in five years among the world’s largest economies. Designing approaches to accelerate clean energy innovation faces uncertainty and a dearth of empirical evidence to inform decision-making. One critical question is whether, and to what degree, cooperative approaches to clean energy innovation can be more effective than unilateral approaches.

Theory suggest that new combinations of inputs are required for technological invention, implying cross-country collaboration that brings together diverse sources of expertise, skills, resources, and other inputs can increase the rate of innovation. However, because countries vary in their comparative advantage in supplying various innovation inputs, the motivation to cooperate is likely asymmetrical across countries and heterogeneous across country pairs. In this paper we explore the degree to which cross-country collaboration spurs innovation in clean energy and the mechanisms facilitating productive cooperation between the sector’s two largest players, U.S. and China.

First, we empirically assess the role of cooperation in spurring novel invention within the observable patent record. We explore several possible mechanisms for how cross-country collaboration increases access to various innovation inputs and benefits cooperating actors. Then, building on our empirical findings, we explore the ways in which transnational institutions can be designed to facilitate successful cross-country collaboration.

In our quantitative analysis of U.S.-China collaborative patenting, using a comprehensive dataset of all patents filed with the U.S. Patent and Trademark Office, we examine whether collaborative inventions engaging both U.S. and Chinese inventors induce greater innovation spillovers, measured by forward citations. We compare citation rates to collaborative patents with that of similar inventions developed by single-country inventor teams. Our preliminary results suggest U.S.-China collaborative patents receive more forward citations than Chinese-only inventions but fewer than U.S.-only inventions. We hypothesize that collaboration offers an opportunity for Chinese scientists to tap into new technological inputs and more effectively leverage foreign R&D inputs to invent technologies with greater spillovers. However, U.S. inventors may choose to collaborate with Chinese inventors for other reasons, such as accessing Chinese capital markets that more readily facilitate prototyping, technology demonstration, and manufacturing.

Building on our quantitative analysis, we examine efforts to facilitate and formalize U.S.-China cooperation in clean energy innovation. We focus our analysis on one highly prominent case, the Clean Energy Research Center (CERC), established in 2009. We analyze CERC procedural documents and conduct interviews with CERC participants to assess the benefits and weaknesses in CERC’s organizational and management structure. Critically, we assess whether CERC’s procedures effectively capitalize the differential comparative advantages highlighted in our empirical analysis that increase the productivity of cooperation. Our preliminary findings indicate that CERC projects have in many cases successfully combined inputs from both countries  but that the overall productivity of CERC has fallen short of expectations. One of the largest barriers to productivity is the difficulty in aligning the differing intellectual property regimes of the two countries.