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Healthcare Procurement and Firm Innovation: Evidence from AI-powered Equipment

Author

Listed:
  • Sofia Patsali

    (Université Côte d'Azur, France
    CNRS, GREDEG)

  • Michele Pezzoni

    (Université Côte d'Azur, France
    CNRS, GREDEG
    Observatoire des Sciences et Techniques, HCERES, France
    ICRIOS, Bocconi University, Italy)

  • Jackie Krafft

    (Université Côte d'Azur, France
    CNRS, GREDEG)

Abstract

In line with the innovation procurement literature, this work investigates the impact of becoming a supplier of a national network of excellence regrouping French hospitals on the supplier's innovative performance. It investigates whether a higher information flow from hospitals to suppliers, proxied by the supply of AI-powered medical equipment, is associated with higher innovative performance. Our empirical analysis relies on a dataset combining unprecedented granular data on procurement bids and equipment with patent data to measure the firm's innovative performance. To identify the firm's innovative activities relevant to the bid, we use an advanced neural network algorithm for text analysis linking firms' equipment descriptions with relevant patent documents. Our results show that firms becoming hospital suppliers have a significantly higher propensity to innovate. About the mechanism, we show that supplying AI-powered equipment further boosts the suppliers' innovative performance, and this raises potential important policy implications.

Suggested Citation

  • Sofia Patsali & Michele Pezzoni & Jackie Krafft, 2023. "Healthcare Procurement and Firm Innovation: Evidence from AI-powered Equipment," GREDEG Working Papers 2023-05, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    • Handle: RePEc:gre:wpaper:2023-05
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access

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