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Does green public procurement trigger environmental innovations?

Year of Publication

2022

This study examines the impact of green public procurement, which is considered an effective demand-side policy for promoting environmental innovations, on firms' introduction of environmental innovations.

Source:

Research Policy

Author(s):

Bastian Krieger, Vera Zipperer

Geography:

Global

Type:

Case Study

Purpose of Measurement:

Understanding the Problem

Impact theme(s):

Policy

This study examines the impact of green public procurement, which is considered an effective demand-side policy for promoting environmental innovations, on firms' introduction of environmental innovations. Despite its high political priority, limited empirical evidence exists on its innovation impact. To investigate this, the researchers construct a new firm-level dataset and employ cross-sectional difference-in-differences methods. The study finds that winning public procurement tenders with additional environmental award criteria increases a firm's likelihood of introducing more environmentally friendly products by an average of 20 percentage points. However, this effect is mainly observed among small and medium-sized firms and is not statistically significant for larger firms. Furthermore, the introduction of more environmentally friendly processes does not show a statistically significant effect.

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