The Role of Public Procurement in Innovation: Theory and Empirical Evidence

This volume was prepared by Simon Wiederhold during his stay at the Friedrich Schiller University of Jena and at the Duke University in Durham, U.S. It was accepted as a doctoral thesis by the School of Economics and Business Administration at the University of Jena in August 2011. The thesis consists of four core chapters, which cover theoretical, empirical, and experimental work. All studies deal with the innovation effects of public procurement, that is, the purchase by governments of goods and services. The idea that public procurement can stimulate innovation originates from the seminal work of Joseph Schumpeter and Jacob Schmookler, which suggests that innovation is sensible to general demand conditions. However, previous research on the role of government demand in innovation has mainly focused on highly situational case studies and anecdotal evidence; econometric studies are almost entirely absent from the literature. There is also a lack of theoretical work on the innovation effects of public procurement to guide the empirical analysis. This thesis picks up on these shortcomings.