Public procurement as a driver of innovation and entrepreneurship

Andrea Bentancor, Gustavo Crespi and Virginia Robano
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Virginia Robano: Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales. Departmento de Economía / Program in Data Science, CoLAB.

No 120, Documentos de Investigación from Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales

Abstract: This paper analyses the effectiveness of public procurement (PP) to spur the development and expansion of innovative ventures. In particular, we focus on whether there is a differentiated effect for start-up companies. We analyse two mechanisms through which PP has a positive impact on companies: (i) making it possible to reach a sufficient scale to expand in the domestic market or abroad and, (ii) complementing innovation promotion programs that operate as drivers of the innovation offer of a country. For the whole sample of firms analysed and our set of three main variables (employment growth, sales growth and export growth), we do not find any evidence indicating that being a supplier of the state affects the development and expansion of companies. We however, reject the null hypothesis that there is no effect of PP on the growth of the exports / turnover ratio of start-ups. Indeed, both in the case of those that have not made innovation and in that of the innovators, being a public supplier is linked to a greater orientation to the external market. We also reject the null hypothesis that there is no impact on the interaction of demand- and supply-side policies

Keywords: firm behavior; positive analysis of policy formulation; entrepreneurship; public policy; industrial policy; Latin America (search for similar items in EconPapers)
JEL-codes: D22 D78 L26 L38 L52 O25 O31 O38 O54 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2019-06
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