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ABSTRACT We examine how property rights institutions shape the economic and innovation consequences of national energy transitions. Using a panel of 194 economies from 1982 to 2022, we analyze how renewable and nonrenewable energy shares interact with two institutional dimensions: formal legal protection of property rights and de facto judicial independence. Crossed random‐intercept mixed models show that institutional effects differ markedly across outcomes. Property rights institutions exhibit limited and statistically imprecise moderation of the relationship between energy composition and short‐run GDP growth. In contrast, institutional influences are more pronounced on the innovation margin. Stronger formal property rights protection is negatively associated with patenting in pooled specifications, while greater judicial independence mitigates the negative patenting association of fossil‐fuel dependence. Additional analyses reveal heterogeneity across specifications and income groups. Mechanism tests provide suggestive evidence that judicial independence operates partly through improved financing conditions. Overall, institutional quality matters more for innovation dynamics during energy transitions than for short‐term economic growth.
Awijen et al. (Wed,) studied this question.