Abstract:
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.
