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Healthcare Procurement and Firm Innovation: Evidence from AI-powered Equipment

Sofia Patsali, Michele Pezzoni and Jackie Krafft
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Sofia Patsali: Université Côte d'Azur, France

No 2023-05, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: In line with the innovation procurement literature, this work investigates the impact of becoming a supplier of a national network of excellence regrouping French hospitals on the supplier's innovative performance. It investigates whether a higher information flow from hospitals to suppliers, proxied by the supply of AI-powered medical equipment, is associated with higher innovative performance. Our empirical analysis relies on a dataset combining unprecedented granular data on procurement bids and equipment with patent data to measure the firm's innovative performance. To identify the firm's innovative activities relevant to the bid, we use an advanced neural network algorithm for text analysis linking firms' equipment descriptions with relevant patent documents. Our results show that firms becoming hospital suppliers have a significantly higher propensity to innovate. About the mechanism, we show that supplying AI-powered equipment further boosts the suppliers' innovative performance, and this raises potential important policy implications.

Keywords: Innovation performance; public procurement; medical equipment; hospitals; artificial intelligence (search for similar items in EconPapers)
JEL-codes: C81 D22 H57 O31 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2023-03
New Economics Papers: this item is included in nep-ain, nep-big, nep-cmp, nep-eur, nep-ino, nep-mfd, nep-sbm and nep-tid
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