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Impact of public procurement for innovation on firm productivity

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  • Kiyoon Shin
  • Jeong-Dong Lee

Abstract

Recently, many governments have been trying to utilize public procurement for innovation as a measure of demand-side innovation policy, considering the limitation of supply-side innovation policy and an emphasis on the effective use of government budget. Some studies have assessed the impact of public procurement for innovation recently; however, no research has attempted to analyse the impact on productivity, which is one of the main policy targets of innovation policy. This study investigates the productivity enhancement effect of public procurement for innovation, using the propensity score matching methodology with differenced outcome variables. Results show that public procurement for innovation plays a positive role in the growth of value-added of the firm contracted, and that it is led by the positive connection between public procurement for innovation and total factor productivity.

Suggested Citation

  • Kiyoon Shin & Jeong-Dong Lee, 2022. "Impact of public procurement for innovation on firm productivity," Applied Economics Letters, Taylor & Francis Journals, vol. 29(11), pages 1016-1021, June.
    • Handle: RePEc:taf:apeclt:v:29:y:2022:i:11:p:1016-1021
    DOI: 10.1080/13504851.2021.1904106
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    Cited by:

    1. Yunjuan Liang & Xin Liang & Hua Wei, 2023. "Sustainable Quality-Incentive Contract Design of Public Technology Innovation Procurement under Asymmetry Information," Sustainability, MDPI, vol. 15(11), pages 1-22, May.

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