Public procurement as policy instrument for innovation

Dirk Czarnitzki, Paul Hünermund and Nima Moshgbar

No 606259, Working Papers of Department of Economics, Leuven from KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven

Abstract: The use of public procurement to promote private innovation activities has attracted increasing attention recently. Germany implemented a legal change in its procurement framework in 2009, which allowed government agencies to specify innovative aspects of procured products as selection criteria in tender calls. We analyze a representative sample of German firms to investigate whether this reform stimulated innovation in the business sector. Across a wide set of specifications—OLS, nearest-neighbor matching, IV regressions and difference-in-differences—we find a robust and significant effect of innovation-directed public procurement on turnover from new products and services. However, our results show that the effect is largely attributable to innovations of more incremental nature rather than market novelties.

Keywords: Public Procurement of Innovation; ublic Procurement with Contracted Innovation; Technical Change; Research and Development; Econometric Policy Evaluation (search for similar items in EconPapers)
Date: 2018-01
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Published in FEB Research Report MSI_1801 vol:MSI_1801

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Related works:
Working Paper: Public procurement as policy instrument for innovation (2018)
Working Paper: Public procurement as policy instrument for innovation (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:ceswps:606259

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