IDEAS home Printed from https://ideas.repec.org/p/frz/wpaper/wp2021_08.rdf.html
   My bibliography  Save this paper

Space policy drives innovation through technological procurement: evidence from Italy

Author

Listed:
  • Paolo Castelnuovo
  • Stefano Clo
  • Massimo Florio

Abstract

To what extent public procurement for mission-oriented policies drives innovation? Space policy is a particularly interesting case study, and we investigate the impact of technological procurement of the Italian Space Agency (ASI) on suppliers’ innovation output. We have built an empirical model that takes advantage of unique data on ASI orders merged with patent and company data of more than 460 firms involved in a procurement relationship with ASI over the period 2004-2018. We combine matching techniques with a diff-in-diff approach with heterogeneous timing in treatment to assess whether becoming a space agency technological supplier has an impact on the extent and quality of firms’ patenting activity. Our findings, that are novel for space policy studies, suggest a statistically significant effect of space agency procurement. The effect is stronger for high-tech suppliers. These results are robust to several alternative specifications and estimation methods and provide evidence about the importance of space policy in enhancing firms’ innovation capacity through the procurement pathway.

Suggested Citation

  • Paolo Castelnuovo & Stefano Clo & Massimo Florio, 2021. "Space policy drives innovation through technological procurement: evidence from Italy," Working Papers - Economics wp2021_08.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    • Handle: RePEc:frz:wpaper:wp2021_08.rdf
    as

    Download full text from publisher

    File URL: https://www.disei.unifi.it/upload/sub/pubblicazioni/repec/pdf/wp08_2021.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Clò, Stefano & Florio, Massimo & Rentocchini, Francesco, 2020. "Firm ownership, quality of government and innovation: Evidence from patenting in the telecommunication industry," Research Policy, Elsevier, vol. 49(5).
    2. Bertoni, Fabio & Tykvová, Tereza, 2015. "Does governmental venture capital spur invention and innovation? Evidence from young European biotech companies," Research Policy, Elsevier, vol. 44(4), pages 925-935.
    3. Ghisetti, Claudia, 2017. "Demand-pull and environmental innovations: Estimating the effects of innovative public procurement," Technological Forecasting and Social Change, Elsevier, vol. 125(C), pages 178-187.
    4. Nicholas S. Vonortas, 2015. "Innovation and public procurement in the United States," Chapters, in: Charles Edquist & Nicholas S Vonortas & Jon M Zabala-Iturriagagoitia & Jakob Edler (ed.), Public Procurement for Innovation, chapter 6, pages 147-178, Edward Elgar Publishing.
    5. Clément de Chaisemartin & Xavier D'Haultfœuille, 2020. "Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects," American Economic Review, American Economic Association, vol. 110(9), pages 2964-2996, September.
    6. Salter, Ammon J. & Martin, Ben R., 2001. "The economic benefits of publicly funded basic research: a critical review," Research Policy, Elsevier, vol. 30(3), pages 509-532, March.
    7. Damian Clarke & Kathya Tapia-Schythe, 2021. "Implementing the panel event study," Stata Journal, StataCorp LP, vol. 21(4), pages 853-884, December.
    8. Giovanni Marin & Francesca Lotti, 2017. "Productivity effects of eco-innovations using data on eco-patents," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 26(1), pages 125-148.
    9. Edler, Jakob & Georghiou, Luke, 2007. "Public procurement and innovation--Resurrecting the demand side," Research Policy, Elsevier, vol. 36(7), pages 949-963, September.
    10. Maria Guadalupe & Olga Kuzmina & Catherine Thomas, 2012. "Innovation and Foreign Ownership," American Economic Review, American Economic Association, vol. 102(7), pages 3594-3627, December.
    11. Marin, Giovanni, 2014. "Do eco-innovations harm productivity growth through crowding out? Results of an extended CDM model for Italy," Research Policy, Elsevier, vol. 43(2), pages 301-317.
    12. repec:fth:harver:1473 is not listed on IDEAS
    13. Jeffrey L. Furman & Scott Stern, 2011. "Climbing atop the Shoulders of Giants: The Impact of Institutions on Cumulative Research," American Economic Review, American Economic Association, vol. 101(5), pages 1933-1963, August.
    14. Charles Edquist & Nicholas S Vonortas & Jon M Zabala-Iturriagagoitia & Jakob Edler (ed.), 2015. "Public Procurement for Innovation," Books, Edward Elgar Publishing, number 15642.
    15. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 287-343, National Bureau of Economic Research, Inc.
    16. Thomas J. Chemmanur & Elena Loutskina & Xuan Tian, 2014. "Corporate Venture Capital, Value Creation, and Innovation," The Review of Financial Studies, Society for Financial Studies, vol. 27(8), pages 2434-2473.
    17. Castelnovo, Paolo & Florio, Massimo & Forte, Stefano & Rossi, Lucio & Sirtori, Emanuela, 2018. "The economic impact of technological procurement for large-scale research infrastructures: Evidence from the Large Hadron Collider at CERN," Research Policy, Elsevier, vol. 47(9), pages 1853-1867.
    18. Robinson, Douglas K.R. & Mazzucato, Mariana, 2019. "The evolution of mission-oriented policies: Exploring changing market creating policies in the US and European space sector," Research Policy, Elsevier, vol. 48(4), pages 936-948.
    19. Hagedoorn, John & Cloodt, Myriam, 2003. "Measuring innovative performance: is there an advantage in using multiple indicators?," Research Policy, Elsevier, vol. 32(8), pages 1365-1379, September.
    20. Betsey Stevenson & Justin Wolfers, 2006. "Bargaining in the Shadow of the Law: Divorce Laws and Family Distress," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(1), pages 267-288.
    21. Bronwyn H. Hall & Nathan Rosenberg (ed.), 2010. "Handbook of the Economics of Innovation," Handbook of the Economics of Innovation, Elsevier, edition 1, volume 1, number 1.
    22. Aschhoff, Birgit & Sofka, Wolfgang, 2009. "Innovation on demand--Can public procurement drive market success of innovations?," Research Policy, Elsevier, vol. 38(8), pages 1235-1247, October.
    23. Edquist, Charles & Zabala-Iturriagagoitia, Jon Mikel, 2012. "Public Procurement for Innovation as mission-oriented innovation policy," Research Policy, Elsevier, vol. 41(10), pages 1757-1769.
    24. Hipp, Christiane & Grupp, Hariolf, 2005. "Innovation in the service sector: The demand for service-specific innovation measurement concepts and typologies," Research Policy, Elsevier, vol. 34(4), pages 517-535, May.
    25. RAITERI Emilio, 2015. "A time to nourish? Evaluating the impact of innovative public procurement on technological generality through patent data," Cahiers du GREThA (2007-2019) 2015-05, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    26. Hall, Bronwyn H. & Lerner, Josh, 2010. "The Financing of R&D and Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 609-639, Elsevier.
    27. Langinier, Corinne, 2004. "Are patents strategic barriers to entry?," Journal of Economics and Business, Elsevier, vol. 56(5), pages 349-361.
    28. Blundell, Richard & Griffith, Rachel & Van Reenen, John, 1995. "Dynamic Count Data Models of Technological Innovation," Economic Journal, Royal Economic Society, vol. 105(429), pages 333-344, March.
    29. Mann, Ronald J. & Sager, Thomas W., 2007. "Patents, venture capital, and software start-ups," Research Policy, Elsevier, vol. 36(2), pages 193-208, March.
    30. Athey, Susan & Imbens, Guido W., 2022. "Design-based analysis in Difference-In-Differences settings with staggered adoption," Journal of Econometrics, Elsevier, vol. 226(1), pages 62-79.
    31. Choi, Suk Bong & Lee, Soo Hee & Williams, Christopher, 2011. "Ownership and firm innovation in a transition economy: Evidence from China," Research Policy, Elsevier, vol. 40(3), pages 441-452, April.
    32. Raiteri, Emilio, 2018. "A time to nourish? Evaluating the impact of public procurement on technological generality through patent data," Research Policy, Elsevier, vol. 47(5), pages 936-952.
    33. Rainer Kattel & Mariana Mazzucato, 2018. "Mission-oriented innovation policy and dynamic capabilities in the public sector," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 27(5), pages 787-801.
    34. Iacus, Stefano M. & King, Gary & Porro, Giuseppe, 2012. "Causal Inference without Balance Checking: Coarsened Exact Matching," Political Analysis, Cambridge University Press, vol. 20(1), pages 1-24, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Castelnovo, Paolo & Clò, Stefano & Florio, Massimo, 2023. "A quasi-experimental design to assess the innovative impact of public procurement: An application to the Italian space industry," Technovation, Elsevier, vol. 121(C).
    2. Clò, Stefano & Frigerio, Marco & Vandone, Daniela, 2022. "Financial support to innovation: The role of European development financial institutions," Research Policy, Elsevier, vol. 51(10).
    3. Andrea Bastianin & Paolo Castelnovo & Massimo Florio & Anna Giunta, 2022. "Big science and innovation: gestation lag from procurement to patents for CERN suppliers," The Journal of Technology Transfer, Springer, vol. 47(2), pages 531-555, April.
    4. Clò, Stefano & Florio, Massimo & Rentocchini, Francesco, 2020. "Firm ownership, quality of government and innovation: Evidence from patenting in the telecommunication industry," Research Policy, Elsevier, vol. 49(5).
    5. Jessica Catalano & Francesco Giffoni & Paolo Castelnovo, 2021. "The impact of space procurement on suppliers: Evidence from Italy," Working Papers 202102, CSIL Centre for Industrial Studies.
    6. Dirk Czarnitzki & Paul Hünermund & Nima Moshgbar, 2018. "Public procurement as policy instrument for innovation," Working Papers of Department of Management, Strategy and Innovation, Leuven 606259, KU Leuven, Faculty of Economics and Business (FEB), Department of Management, Strategy and Innovation, Leuven.
    7. Paolo Castelnovo & Martina Dal Molin, 2021. "The learning mechanisms through public procurement for innovation: The case of government‐funded basic research organizations," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 92(3), pages 411-446, September.
    8. Czarnitzki, Dirk & Hünermund, Paul & Moshgbar, Nima, 2020. "Public Procurement of Innovation: Evidence from a German Legislative Reform," International Journal of Industrial Organization, Elsevier, vol. 71(C).
    9. Castelnovo, Paolo, 2022. "Innovation in private and state-owned enterprises: A cross-industry analysis of patenting activity," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 98-113.
    10. Dai, Xiaoyong & Li, Yanchao & Chen, Kaihua, 2021. "Direct demand-pull and indirect certification effects of public procurement for innovation," Technovation, Elsevier, vol. 101(C).
    11. Paolo Castelnovo & Gelsomina Catalano & Francesco Giffoni & Matteo Landoni, 2024. "The outcomes of public procurements: an empirical analysis of the Italian space industry," The Journal of Technology Transfer, Springer, vol. 49(1), pages 367-399, February.
    12. Castelnovo, Paolo & Florio, Massimo & Forte, Stefano & Rossi, Lucio & Sirtori, Emanuela, 2018. "The economic impact of technological procurement for large-scale research infrastructures: Evidence from the Large Hadron Collider at CERN," Research Policy, Elsevier, vol. 47(9), pages 1853-1867.
    13. Serenella Caravella & Francesco Crespi, 2021. "The role of public procurement as innovation lever: evidence from Italian manufacturing firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 30(7), pages 663-684, October.
    14. Paolo CASTELNOVO & Massimo FLORIO, 2019. "Mission-oriented Public Organizations for Knowledge Creation," Departmental Working Papers 2019-09, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    15. Kalyuzhnova, Yelena & Azhgaliyeva, Dina & Belitski, Maksim, 2022. "Public Policy Instruments for Procurement: An Empirical Analysis," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    16. Kiyoon Shin & Yeongjun Yeo & Jeong-Dong Lee, 2020. "Revitalizing the Concept of Public Procurement for Innovation (PPI) from a Systemic Perspective: Objectives, Policy Types, and Impact Mechanisms," Systemic Practice and Action Research, Springer, vol. 33(2), pages 187-211, April.
    17. Krieger, Bastian & Zipperer, Vera, 2022. "Does green public procurement trigger environmental innovations?," Research Policy, Elsevier, vol. 51(6).
    18. Pierrakis, Yannis & Saridakis, George, 2017. "Do publicly backed venture capital investments promote innovation? Differences between privately and publicly backed funds in the UK venture capital market," Journal of Business Venturing Insights, Elsevier, vol. 7(C), pages 55-64.
    19. Bertoni, Fabio & Tykvová, Tereza, 2015. "Does governmental venture capital spur invention and innovation? Evidence from young European biotech companies," Research Policy, Elsevier, vol. 44(4), pages 925-935.
    20. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2017. "Innovations, growth and participation in advanced economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 14(2), pages 293-351, April.

    More about this item

    Keywords

    Public procurement; space industry; space policy; innovation.;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • 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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:frz:wpaper:wp2021_08.rdf. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Giorgio Ricchiuti (email available below). General contact details of provider: https://edirc.repec.org/data/defirit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.