Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/301866 
Year of Publication: 
2024
Series/Report no.: 
ZEW Discussion Papers No. 24-055
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
This paper investigates the impact of Public Procurement of Innovation (PPI) and Research and Development (R&D) grants on firms' R&D investment using data from Belgian R&D-active firms over the past decade. Our empirical analysis robustly reveals a non-negligible crowding-out effect between the two instruments, suggesting a substitutive relationship. While each policy individually positively influences R&D investment, their combined implementation diminishes their effectiveness. These results challenge prevailing evidence and emphasize the need for a careful policy implementation, raising policymakers' awareness against a blanket increase in innovation policies without considering potential interactions.
Subjects: 
Public procurement of innovation
Research and Development
Econometric policy evaluation
Crowding-out
JEL: 
H57
O38
Document Type: 
Working Paper

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