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Space policy drives innovation through technological procurement: evidence from Italy

Paolo Castelnuovo, Stefano Clo () and Massimo Florio ()

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: To what extent public procurement for mission-oriented policies drives innovation? Space policy is a particularly interesting case study, and we investigate the impact of technological procurement of the Italian Space Agency (ASI) on suppliers’ innovation output. We have built an empirical model that takes advantage of unique data on ASI orders merged with patent and company data of more than 460 firms involved in a procurement relationship with ASI over the period 2004-2018. We combine matching techniques with a diff-in-diff approach with heterogeneous timing in treatment to assess whether becoming a space agency technological supplier has an impact on the extent and quality of firms’ patenting activity. Our findings, that are novel for space policy studies, suggest a statistically significant effect of space agency procurement. The effect is stronger for high-tech suppliers. These results are robust to several alternative specifications and estimation methods and provide evidence about the importance of space policy in enhancing firms’ innovation capacity through the procurement pathway.

Keywords: Public procurement; space industry; space policy; innovation. (search for similar items in EconPapers)
JEL-codes: C25 H57 O32 O38 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2021
New Economics Papers: this item is included in nep-eur, nep-ino, nep-sbm and nep-tid
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