TY - JOUR
T1 - Public Procurement of Innovation
T2 - Evidence from a German Legislative Reform
AU - Czarnitzki, Dirk
AU - Hünermund, Paul
AU - Moshgbar, Nima
PY - 2020/7
Y1 - 2020/7
N2 - Using 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 calls for tender. We analyze a sample of 3410 German firms to investigate whether this reform stimulated innovation in the business sector. Across a wide range of specifications – OLS, nearest-neighbor matching, IV regressions and difference-in-differences – we find a robust and significant effect of innovation-directed public procurement on turnover with new products and services. At the same time, our results demonstrate that public procurement mainly stimulates innovations of more incremental nature rather than true market novelties.
AB - Using 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 calls for tender. We analyze a sample of 3410 German firms to investigate whether this reform stimulated innovation in the business sector. Across a wide range of specifications – OLS, nearest-neighbor matching, IV regressions and difference-in-differences – we find a robust and significant effect of innovation-directed public procurement on turnover with new products and services. At the same time, our results demonstrate that public procurement mainly stimulates innovations of more incremental nature rather than true market novelties.
KW - Public procurement of innovation
KW - Public procurement with contracted innovation
KW - Innovation
KW - Research and development
KW - Econometric policy evaluation
KW - Public procurement of innovation
KW - Public procurement with contracted innovation
KW - Innovation
KW - Research and development
KW - Econometric policy evaluation
U2 - 10.1016/j.ijindorg.2020.102620
DO - 10.1016/j.ijindorg.2020.102620
M3 - Journal article
SN - 0167-7187
VL - 71
JO - International Journal of Industrial Organization
JF - International Journal of Industrial Organization
M1 - 102620
ER -