Does the Technological Content of Government Demand Matter for Private R&D? Evidence from US States

Viktor Slavtchev and Simon Wiederhold ()

No 10/2014, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: Governments purchase everything from airplanes to zucchini. This paper investigates the role of the technological content of government procurement in innovation. We theoretically show that a shift in the composition of public purchases toward high-tech products translates into higher economy-wide returns to innovation, leading to an increase in the aggregate level of private research and development (R&D). Collecting unique panel data on federal procurement in US states, we find that reshuffling procurement toward high-tech industries has an economically and statistically significant positive effect on private R&D, even after extensively controlling for other R&D determinants. Instrumental-variable estimations support a causal interpretation of our findings.

Keywords: government demand; private R&D; endogenous growth; innovation policy; öffentliche Beschaffung; private FuE; endogenes Wachstum; Innovationspolitik; FuE-Politik (search for similar items in EconPapers)
JEL-codes: E60 H57 O31 O33 O38 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Does the Technological Content of Government Demand Matter for Private R&D? Evidence from US States (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:iwh-10-14

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