Title: Determinants of structural change and innovation in the German steel industry – an empirical investigation

Authors: Joachim Schleich

Addresses: Fraunhofer Institute for Systems and Innovation Research, Department of Energy Policy and Energy Systems, Breslauer Str. 48, 76139 Karlsruhe, Germany and Virginia Polytechnic Institute and State University, Department of Agricultural and Applied Economics, Blacksburg, VA 24061, USA

Abstract: In the last 30 years, specific primary energy use in the German steel industry has decreased by about 30%. This decrease can be attributed to both structural changes in the steel industry (from basic oxygen steel to electric arc furnace steel) and to the improved energy efficiency of new technologies within these technological paradigms. In this paper, the relevance of various determinants for the diffusion of electric arc furnace steel (structural change) and for the energy-use of new technologies in the German steel industry sector is assessed econometrically. The empirical findings support the hypotheses that the diffusion of electric arc furnace steel is accelerated by energy and material input prices and dampened by path dependencies. The findings further suggest that the energy performance of new technologies is affected by energy and material input prices, by expenditures for research and development, and – for basic oxygen steel – also by industry concentration.

Keywords: induced innovation; endogenous technological change; technology diffusion; steel industry; Germany; energy efficiency; public policy.

DOI: 10.1504/IJPP.2007.012278

International Journal of Public Policy, 2007 Vol.2 No.1/2, pp.109 - 123

Published online: 02 Feb 2007 *

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