Is excessive public procurement a brake on firms' innovative output?: An analysis applied to the Italian context
In: Sinappsi: connessioni tra ricerca e politiche pubbliche : rivista quadrimestrale dell'Istituto nazionale per l'analisi delle politiche pubbliche, Volume 12, Issue 3, p. 66-91
ISSN: 2611-6332
This article investigates the relation between public procurement (PP) and firms' innovation, by analysing information on Italian firms. Taking advantage of the peculiarities of the Italian context, I test whether procurement firms report a higher propensity to innovate, and whether this propensity varies with the level of PP a firm engages in. Even in a country with a high polarisation in firm performance, PP is found to be associated with an increase in the probability of innovating, although this result is limited to micro/small firms, low shares of PP, and firms having product innovation as their target.