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

Abstract 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.