Public procurement as policy instrument for innovation

Dirk Czarnitzki, Paul Hünermund and Nima Moshgbar

No 18-001, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

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 innovationdirected 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; Public Procurement with Contracted Innovation; Technical Change; Research and Development; Econometric Policy Evaluation (search for similar items in EconPapers)
JEL-codes: H57 O38 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-eur, nep-ino and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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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:zbw:zewdip:18001

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