Does green public procurement trigger environmental innovations?


Krieger, Bastian ; Zipperer, Vera


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URL: https://madoc.bib.uni-mannheim.de/60942
URN: urn:nbn:de:bsz:180-madoc-609426
Document Type: Working paper
Year of publication: 2021
The title of a journal, publication series: ZEW Discussion Papers
Volume: 21-071
Place of publication: Mannheim
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: H57 , O38 , Q55 , Q58,
Keywords (English): green public procurement , environmental innovation , demand pull
Abstract: Green public procurement has gained high political priority and is argued to be an effective demand-side policy to trigger environmental innovations. Its implementation usually takes the form of environmental award selection criteria in public procurement tenders. However, there is no direct or broad empirical evidence on its innovation impact. There are even doubts about its effectiveness as an innovation policy tool, as it does not require innovations as part of its contracts and might only influence the selection of awardees in public procurement tenders. We construct a novel firm-level dataset to investigate the effect of winning green public procurement awards on firms’ introduction of environmental innovations. Employing cross-sectional difference-in-differences methods, we find that winning green public procurement awards increases a firm’s probability of introducing more environmentally friendly products on average by 20 percentage points. We show that this effect is driven by small and medium-sized firms and is not significant for larger firms. There is no significant effect on the introduction of more environmentally friendly processes.




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