Public Procurement of Innovation: Evidence from a German Legislative Reform

Dirk Czarnitzki*, Paul Hünermund, Nima Moshgbar

*Corresponding author af dette arbejde

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review


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.
TidsskriftInternational Journal of Industrial Organization
Antal sider16
StatusUdgivet - jul. 2020
Udgivet eksterntJa


  • Public procurement of innovation
  • Public procurement with contracted innovation
  • Innovation
  • Research and development
  • Econometric policy evaluation