Buyer’s market-oriented culture, strategic procurement capability, and customer performance in the public procurement of innovations

Abstract The public procurement of innovations is a demand-side policy instrument that harnesses supplier innovations to improve products and services delivered to the customers. This study analyses a nation-wide survey of Finnish public sector contracting authorities. A sequential mediation model suggests that the public sector buyer’s market-oriented culture is positively associated with the procurer’s strategic procurement capability, which in turn predicts the use of public procurement of innovations to create customer value for customers. These results are robust to a potentially biased perception of customer performance.