Demand-side vs. supply-side technology policies: hidden treatment and new empirical evidence on the policy mix

This paper provides empirical evidence about the impact of innovative public procurement upon firms’ innovative behaviour. This paper makes use of a quasi-experimental setting as it is done in R&D policy evaluation. Previous studies on R&D subsidies, not taking into account other policy options in the policy mix, suffered of hidden treatment bias and overestimated their impact. We replicate existing results and show that they do not hold when innovative public procurement is also taken into account. We advocate for an approach in policy evaluation which takes into account the policy mix.