Energy Efficiency Regulation and R&D Activity:A Study of the Top Runner Program in Japan

Abstract

The Top Runner Program, a new approach to enhancing the energy efficiency of appliances and vehicles, has been in-troduced in Japan. In this paper an empirical analysis of the impact of the program and the labeling systems on firms’ R&D efforts is carried out. The results show that the Top Runner Program and the labeling system for appliances led to increases in R&D expenditures by appliance producers. The program combined with the labeling system caused a 9.5% increase in appliance producers’ R&D expenditures. However, the Top Runner Program and the labeling system for motor vehicles had little or even a negative effect on the innovative activity of motor vehicle manufacturers. R&D ex-penditures by motor vehicle producers may have increased in response to the exhaust gas regulation for diesel-powered vehicles rather than the energy efficiency regulation.