Does public procurement for innovation increase innovative efforts? The case of Brazil

Compras governamentais para inovação aumentam o esforço inovador? Evidências ao caso Brasileiro

Abstract

The paper uses microdata from the Brazilian Innovation Survey to assess the effect of public procurement on firms’ private R&D expenditures. The PINTEC 2014 edition included in its policy module a new question about public procurement related to firms’ innovative activities. The paper uses this information to define a treated sample composed by firms that participated in public procurement with innovative attributes. The paper builds a control sample through coarsened exact matching and tests the effect of innovation-related public procurement on firms’ private R&D to sales ratio. The results suggest a positive impact of public procurement of innovation on R&D intensity. Data also shows that most firms involved in PPI are small and belong to low-technology sectors. These features disclose an important characteristic of the public procurement of innovation: its ability to target small firms and contribute to local development.

Keywords:
Public Procurement of Innovation; Policy Assessment; Demand-Side Innovation Policy; Brazil