Sandro Montresor (GSSI)

Green-tech transition beyond regional borders: the role of embodied green knowledge flows

Abstract. Given their pivotal role in the green transition, we explore to what extent regions can develop new green technologies by relying on external exchanges of green knowledge. We extend recombinant innovation theory to commodity-embodied knowledge and maintain that inter-industry flows of commodities, in which new green knowledge gets incorporated, represent a channel through which regions can increase their opportunities of specialising into new green technologies, in a more exploratory manner, and with differences between domestic and foreign flows. By combining the EUREGIO input-output database with patent data from OECD RegPat, we test these three hypotheses with respect to 237 EU (NUTS2) regions over the period 2000-2019. Measuring the regions’ centrality in the network of inter-regional flows of embodied green knowledge(GreenFlowNet) and plugging this centrality in a model of related diversification for green technologies, our expectations are confirmed, but mainly for outward flows of green knowledge towards other regions, rather than inward ones. Furthermore, we find that regions’ green-tech diversification appears enabled (at the extensive margin) by their centrality in the domestic GreenFlowNet – capturing flows among regional industries within the same country – and accelerated (at the intensive margin) by their centrality in the foreign GreenFlowNet – made up of flows between regional industries across different countriers. Policy implications are drawn accordingly.