Public Procurement of Innovation: Evidence from a German Legislative Reform

Paul Hünermund, Maastricht University: School of Business and Economic

The use of public procurement to promote private innovation activities has attracted increasing attention recently. Germany implemented a legal change in its procurement framework in 2009, which allowed government agencies to specify innovative aspects of procured products as selection criteria in tender calls. We analyze a representative sample of German firms to investigate whether this reform stimulated innovation in the business sector. Across a wide set of specifications - OLS, nearest-neighbor matching, IV regressions and difference-in-differences - we find a robust and significant effect of innovation-directed public procurement on turnover from new products and services. However, our results show that the effect is largely attributable to innovations of more incremental nature rather than market novelties.

About the speaker

Dr. Paul Hünermund is an assistant professor at Maastricht University's School of Business and Economics. He studied economics at the University of Mannheim, HEC Lausanne, and New York University, and obtained a PhD in business economics from KU Leuven in 2017. His research interests lie in the area of innovation, entrepreneurship, industrial organization, and applied econometrics. During his doctoral studies, Paul was affiliated with the Centre for European Economic Research (ZEW) in Mannheim / Germany, where he gained experience in policy consulting for, amongst others, the European Commission and the German Federal Ministry of Education and Research. Paul is member of the Creativity, Innovation, and Entrepreneurship (CIE) and the Data-Driven Decision Making (D3M) research groups at Maastricht University's School of Business and Economics.

Venue: Room 0.17

Date: 19 June 2019

Time: 16:00 - 17:00  CET