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The Economic Impact of CERN Procurement: Evidence from the Large Hadron Collider

Author

Listed:
  • Massimo FLORIO

    ()

  • Paolo CASTELNOVO

    ()

  • Emanuela SIRTORI

    ()

  • Lucio ROSSI
  • Stefano FORTE

Abstract

Building the Large Hadron Collider (1995-2008) required frontier technologies. We wanted to discover whether there has been a long-term "learning by doing" effect on CERN suppliers' profitability, beyond the initial order. The evidence on this effect was until now fragmentary, mainly based on interviews or case histories. CERN granted us access to their LHC procurement database, including 1360 suppliers from 35 countries for a total of 11969 orders. We collected 23-year long time series of financial data (1991-2013) for a large sample of companies. After controlling for time fixed-effects and trends, firm-level and country-level possible confounding factors, we observe a statistically significant (p<0.01) 'CERN effect' on long-run profit margin of high-tech suppliers, while the effect on non-high-tech suppliers is not statistically significant.

Suggested Citation

  • Massimo FLORIO & Paolo CASTELNOVO & Emanuela SIRTORI & Lucio ROSSI & Stefano FORTE, 2016. "The Economic Impact of CERN Procurement: Evidence from the Large Hadron Collider," Departmental Working Papers 2016-12, Department of Economics, Management and Quantitative Methods at Universit√† degli Studi di Milano.
  • Handle: RePEc:mil:wpdepa:2016-12
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    Keywords

    CERN; Large Hadron Collider; Technological spillovers; Supply chain;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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