From Public Contracts to Private Innovation: How Government Procurement Drives New Quality Productivity

While innovation-driven development has become essential for economic transformation, the specific mechanisms through which government procurement enhances enterprises’ new quality productivity remain underexplored, particularly regarding how procurement policies facilitate technological innovation, human capital development, and digital transformation. Using comprehensive data from Chinese A-share listed companies from 2015 to 2022, this study employs fixed effects models and instrumental variable approaches within a “capability-willingness-action” theoretical framework to examine government procurement’s causal impact on new quality productivity. Results demonstrate that government procurement significantly increases firms’ new quality productivity, operating through three distinct transmission mechanisms: first, by alleviating financing constraints and reducing debt costs to enhance innovation capability; second, by reducing uncertainty perception and incentivizing digital transformation to strengthen development willingness; and third, by establishing technical standards and quality requirements to promote concrete actions in R&D investment, talent cultivation, and innovation output. Heterogeneity analysis reveals particularly strong effects among state-owned enterprises, growth-stage firms, and companies with superior internal control quality. These findings provide systematic evidence of government procurement’s multidimensional impact on new quality productivity, offering crucial insights for optimizing procurement policy design and advancing innovation-driven economic development.