When oil prices move, who innovates? The asymmetric response of hydrogen technologies to oil shocks

This paper examines how oil price shocks shape hydrogen patent innovation across 33 countries over the period 2000–2024, using the panel local projection framework with an asymmetric shock decomposition. Four findings emerge. First, the aggregate response of hydrogen patenting to symmetric oil price shocks is statistically null, a result that conceals rather than reflects the underlying relationship. Once shocks are decomposed into cumulative positive and negative components, a clear asymmetry emerges: positive oil shocks raise hydrogen patent value by approximately 2 percent over a five-year horizon, while negative shocks suppress it by approximately 3 percent, with the downside effect at least as large as the upside. Second, the asymmetry is concentrated in fossil-based hydrogen through an incumbent-leverage mechanism, while green hydrogen via water electrolysis responds significantly to positive shocks at a comparable magnitude but remains insulated from price declines; by-product and biomass routes show weak or negligible responses. Third, the response is conditioned by country-level infrastructure and institutions: hydrogen R&D capacity, CCUS deployment, and institutional quality amplify the positive-shock response, with no comparable amplification of the negative-shock contraction. Fourth, the positive-shock stimulus operates only in countries with a supporting climate-policy framework, whether hydrogen-specific coordination or economy-wide carbon pricing, while countries without such frameworks show no response; the negative-shock suppression appears in the full sample but not cleanly within subgroups. These findings qualify the intuition that high fossil prices automatically catalyze the green transition and indicate that both framework adoption and countercyclical R&D support are needed to make hydrogen innovation robust to the oil price cycle.