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Additional award criteria in public procurement: Tenders and firms' innovation performance heterogeneity

Author

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  • Krieger, Bastian
  • Prüfer, Malte
  • Strecke, Linus

Abstract

Public procurement is widely regarded as an important instrument to foster innovation. We examine how additional award criteria beyond price relate to firms' realized innovation performance by combining representative firm-level data from the German Innovation Survey with official tender-level data from Tenders Electronic Daily and estimating two-way fixed effects models. The results suggest that winning price-based tenders is associated with lower product and service innovation and higher turnover from established products and services, while criteria-based procurement shows an inverse U-shaped relationship between the average length of criteria lists in won tenders and firms' innovation outcomes. Overall, the findings indicate that the innovation effects of public procurement depend not only on whether additional award criteria are used, but also on how extensively they are applied.

Suggested Citation

  • Krieger, Bastian & Prüfer, Malte & Strecke, Linus, 2026. "Additional award criteria in public procurement: Tenders and firms' innovation performance heterogeneity," ZEW Discussion Papers 26-018, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:341408
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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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