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The role of public procurement as innovation lever: evidence from Italian manufacturing firms

Author

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  • Serenella Caravella
  • Francesco Crespi

Abstract

The study focuses on the impact exerted on private R&D expenditures by regular and innovative public procurement when taken in combination or insolation with supply-push measures. The econometric analysis relies on a pulled sample of 4206 Italian manufacturing firms observed between 2010 and 2014. The empirical exercise confirms previous evidences on the relevance of technology-push instruments in sustaining firms’ innovativeness. On the contrary, the ability of public procurement activities in shaping innovative investments is found to depend on a number of instances related to: (i) the adoption of contemporaneous supply side measures; (ii) the inclusion of innovative demand in procurement contracts. The analysis provides important suggestions with respect to the potential effectiveness of demand-side tools when implemented in weak administrative and innovation systems, as in the Italian case. Moreover, it is shown that the design of the policy mix matters, and its effectiveness improves when demand-side and supply-side instruments are jointly implemented.

Suggested Citation

  • Serenella Caravella & Francesco Crespi, 2021. "The role of public procurement as innovation lever: evidence from Italian manufacturing firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 30(7), pages 663-684, October.
    • Handle: RePEc:taf:ecinnt:v:30:y:2021:i:7:p:663-684
    DOI: 10.1080/10438599.2020.1761591
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    Cited by:

    1. Dirk Czarnitzki & Malte Prüfer, 2024. "The Interplay between Public Procurement of Innovation and R&D Grants: Empirical Evidence from Belgium," Working Papers of ECOOM - Centre for Research and Development Monitoring 746875, KU Leuven, Faculty of Economics and Business (FEB), ECOOM - Centre for Research and Development Monitoring.
    2. Dorothea Schäfer & Andreas Stephan & Sören Fuhrmeister, 2024. "The impact of public procurement on financial barriers to general and green innovation," Small Business Economics, Springer, vol. 62(3), pages 939-959, March.
    3. Chiappinelli, Olga & Giuffrida, Leonardo M. & Spagnolo, Giancarlo, 2025. "Public procurement as an innovation policy: Where do we stand?," International Journal of Industrial Organization, Elsevier, vol. 100(C).
    4. Bastian Krieger & Malte Prüfer & Linus Strecke, 2024. "Public procurement can hinder innovation," Working Papers of Department of Management, Strategy and Innovation, Leuven 739379, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
    5. Dorothea Schäfer & Andreas Stephan & Sören Fuhrmeister, 2022. "The Impact of Public Procurement on Financial Barriers to Green Innovation: Evidence from European Community Innovation Survey," Discussion Papers of DIW Berlin 2014, DIW Berlin, German Institute for Economic Research.
    6. Krieger, Bastian & Füner, Lena & Prüfer, Malte, 2024. "Which start-ups win public procurement tenders?," ZEW Discussion Papers 24-072, ZEW - Leibniz Centre for European Economic Research.
    7. Fu, Shaoyan & Liu, Dehai & Huang, Fuqiang, 2024. "Synergistic effect of government policy and market mechanism on the innovation of new energy vehicle enterprises," Energy, Elsevier, vol. 295(C).
    8. Castelnovo, Paolo & Clò, Stefano & Florio, Massimo, 2023. "A quasi-experimental design to assess the innovative impact of public procurement: An application to the Italian space industry," Technovation, Elsevier, vol. 121(C).
    9. Josephine Namwanje & Kisu Yahaya & Pereez Nimusima & Kahdiri Rwambale, 2024. "Empirical Study on Procurement Planning Practices and Procurement Performance of Centenary Bank, Uganda," American Journal of Supply Chain Management, AJPO Journals Limited, vol. 9(1), pages 63-73.
    10. Paolo Castelnovo & Gelsomina Catalano & Francesco Giffoni & Matteo Landoni, 2024. "The outcomes of public procurements: an empirical analysis of the Italian space industry," The Journal of Technology Transfer, Springer, vol. 49(1), pages 367-399, February.
    11. Krieger, Bastian & Füner, Lena & Prüfer, Malte, 2025. "The participation of young firms in public procurement," ZEW Discussion Papers 25-020, ZEW - Leibniz Centre for European Economic Research.
    12. 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.
    13. Krieger, Bastian & Zipperer, Vera, 2022. "Does green public procurement trigger environmental innovations?," Research Policy, Elsevier, vol. 51(6).
    14. Chiappinelli, Olga & Giuffrida, Leonardo M. & Spagnolo, Giancarlo, 2023. "Public procurement as an innovation policy: Where do we stand?," ZEW Discussion Papers 23-002, ZEW - Leibniz Centre for European Economic Research.
    15. Fabrizio Fusillo & Gianluca Orsatti & Alessandra Scandura, 2025. "Public green demand and green innovation: evidence from US firms," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 15(3), pages 647-679, September.
    16. Fan, Yuezhen & Shi, Linsong, 2025. "The role of government fiscal incentives in green technological innovation: A nonlinear analytical framework," International Review of Economics & Finance, Elsevier, vol. 103(C).
    17. Francesco Zezza & Dario Guarascio, 2024. "Fiscal policy, public investment and structural change: a P-SVAR analysis on Italian regions," Regional Studies, Taylor & Francis Journals, vol. 58(6), pages 1356-1373, June.

    More about this item

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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