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Public procurement as a driver of innovation and entrepreneurship

Author

Listed:
  • Andrea Bentancor

    (Universidad de Talca)

  • Gustavo Crespi

    (Inter-American Development Bank)

  • Virginia Robano

    (Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales. Departmento de Economía / Program in Data Science, CoLAB.)

Abstract

This paper analyses the effectiveness of public procurement (PP) to spur the development and expansion of innovative ventures. In particular, we focus on whether there is a differentiated effect for start-up companies. We analyse two mechanisms through which PP has a positive impact on companies: (i) making it possible to reach a sufficient scale to expand in the domestic market or abroad and, (ii) complementing innovation promotion programs that operate as drivers of the innovation offer of a country. For the whole sample of firms analysed and our set of three main variables (employment growth, sales growth and export growth), we do not find any evidence indicating that being a supplier of the state affects the development and expansion of companies. We however, reject the null hypothesis that there is no effect of PP on the growth of the exports / turnover ratio of start-ups. Indeed, both in the case of those that have not made innovation and in that of the innovators, being a public supplier is linked to a greater orientation to the external market. We also reject the null hypothesis that there is no impact on the interaction of demand- and supply-side policies

Suggested Citation

  • Andrea Bentancor & Gustavo Crespi & Virginia Robano, 2019. "Public procurement as a driver of innovation and entrepreneurship," Documentos de Investigación 120, Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales.
    • Handle: RePEc:avs:wpaper:120
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    References listed on IDEAS

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    1. Davis, Steven J & Haltiwanger, John & Schuh, Scott, 1996. "Small Business and Job Creation: Dissecting the Myth and Reassessing the Facts," Small Business Economics, Springer, vol. 8(4), pages 297-315, August.
    2. Georghiou, Luke & Edler, Jakob & Uyarra, Elvira & Yeow, Jillian, 2014. "Policy instruments for public procurement of innovation: Choice, design and assessment," Technological Forecasting and Social Change, Elsevier, vol. 86(C), pages 1-12.
    3. Veiko Lember & Rainer Kattel & Tarmo Kalvet, 2014. "How Governments Support Innovation Through Public Procurement: Comparing Evidence from 11 Countries," Springer Books, in: Veiko Lember & Rainer Kattel & Tarmo Kalvet (ed.), Public Procurement, Innovation and Policy, edition 127, chapter 0, pages 287-309, Springer.
    4. Veiko Lember & Rainer Kattel & Tarmo Kalvet (ed.), 2014. "Public Procurement, Innovation and Policy," Springer Books, Springer, edition 127, number 978-3-642-40258-6, February.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    firm behavior; positive analysis of policy formulation; entrepreneurship; public policy; industrial policy; Latin America;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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