Does the R&D Public Procurement Matter for High-Tech Exports? Evidence from the USA

Dina Dardir (1, 2, 3)

1 Cairo University
2 FEPS - Faculty of Economics and Political Science
3 UP1 - Université Paris 1 Panthéon-Sorbonne

Recently, demand-side innovation policies have succeeded in stimulating technology upgrading in many countries around the world. Especially, public procurement has become a major and important industrial policy for achieving technological development and competitiveness. This paper examines empirically the impact of R&D public procurement (innovative public procurement) on high-tech exports of 50 U.S. states and the District of Columbia over the period 2000-2008. The econometric analysis relies on panel fixed-effects estimations and an instrumental variable approach to investigate the causal effect of the R&D public procurement on high-tech exports. Based on a unique panel dataset of federal procurement in the USA, the empirical results show that there is a positive and statistically significant effect of R&D federal procurement on high-tech exports. The results of this paper confirm the importance and effectiveness of R&D public procurement as a policy to enhance technological competitiveness. The results are robust using various robustness checks. Moreover, this paper also shows three potential mechanisms through which R&D public procurement may affect high-tech exports.

Keywords: public spending; Government Purchases; R&D; High-tech industries; The USA

Domains: Humanities and Social Sciences

Dina Dardir. Does the R&D Public Procurement Matter for High-Tech Exports? Evidence from the USA. 18th Annual INTERNATIONAL INDUSTRIAL ORGANIZATION CONFERENCE, Drexel University, Philadelphia, PA, May 2020, Philadelphia, United States. ⟨hal-04047813⟩