Supported by: Anniversary Fund of the Oesterreichische Nationalbank
Study by: Austrian Institute of Economic Research
A cornerstone of green transition policies is the EU Emission Trading Scheme (EU ETS). The policy instrument increases the
costs of CO2, thereby exerting a push effect to lower emissions. We empirically study key aspects of the directed technological
change literature against the backdrop of the EU ETS and hard-to-abate (HTA) manufacturing industries. These are characterised
by scale intensive, continuous production processes and considerable sunk costs related to capital investments. The technologies
used are determined by established trajectories that determine the knowledge base and production networks of these companies.
This causes substantial path dependence and lock-in situations. The research draws on a multitude of datasets, such as EU
ETS data at the plant level, firm performance and patenting information, foreign direct investments, and recipient level information
of EU regional funds. The research is highly policy relevant, and addresses questions about the regional distribution of HTA
industries in the EU, the breaking-up of technological path dependence, stick (EU ETS) and carrot (co-funding) mechanisms,
carbon leakage, and firm performance.
Commissioned by: European Commission-Framework Programme
The changing nature of global supply chains (GSCs) requires a rethinking in the design of appropriate policy responses and
in taking into account their employment and social impacts. The overall goal of RETHINK-GSC is to enhance our understanding
of the impact of GSCs using new measures that can quantify the role knowledge flows, and more generally services inputs, and
thus acknowledge the increasing importance of intangibles in global production. The project provides new and innovative methodologies
for assessing the development of global supply chains, which generates new knowledge on ongoing and expected changes in GSCs
due to shocks. The research, both theoretical and empirical, will be conducted mainly at the level of the firm – the unit
that ultimately decides on the organisation of international production. Using the RETHINK-GSC innovative measures allows
the projects' researchers and future scholars (i) to investigate the interaction between tangible and intangible GSCs to evaluate
the changing nature of global supply chains, (ii) to provide novel ways of analysing the impact of GSCs on social, economic
and environmental outcomes in European countries and (iii) to evaluate the resilience of GSCs to exogenous shocks.