Exploration of the Effectiveness of Public Procurement for Innovation: Panel Analysis of EU Countries' Data

This research focuses on the impact of public procurement for innovation (PPI) on a country's level of innovativeness. The available literature primarily consists of case studies that identify PPI's impact on the innovativeness of particular firms. Therefore, this paper developed an econometric model to investigate the impact of PPI on the innovativeness of EU countries. The model tested the impact of four different innovation policy measures (PPI, R&D subsidies, regulations and cooperation). The results showed that in different model settings, PPI was positively and significantly related to countries' innovativeness, whereas the other three measures showed low significance. These research fmdings may be important to policy makers when selecting appropriate measures for promoting innovation and thereby also enhancing their country's competitiveness