Innovation performance of the US American and European electricity supply industry

Using a production function approach based on Cobb-Douglas, this analysis relates R&D efforts of 32 electric utilities on both sides of the Atlantic to their performance in terms of labour productivity. We find that higher R&D levels generally have a positive impact on revenues. However, only in the sub-sample of 16 electricity suppliers in Europe this effect is significant. Knowledge spill-over effects can be estimated for the US American sub-sample, since US utilities have bundled their R&D efforts in a centralized research institution and have to report that data. Our analysis reveals, though, that collaborative research efforts do not lead to positive spill-overs at the assumption of a time delay of one year.