Overcoming the innovation threshold through innovative public procurement: evidence from CERN

This paper contributes to the literature on the impact of large-scale research infrastructure projects on innovation. We use public procurement data to investigate the impact of CERN-the European Organization for Nuclear Research-on the likelihood of firms becoming innovators. Specifically, we assess the effect of CERN on the probability of a firm filing a patent application for the first time, and the timing of this effect. Using survival models and Propensity Score Matching to construct a counterfactual sample of firms, we show that qualifying for an industrial procurement contract with CERN increases the probability of filing a first patent. This effect emerges with a lag of 3-7 years from the start of the collaboration, suggesting a relatively slow process of the absorption of new ideas. We find heterogeneity in this effect: in fact, it occurs mostly within small firms, whose relationship with CERN involves more sophisticated technological problems and a higher frequency of interaction.