Public Procurement, Local Labor Markets and Green Technological Change. Evidence from US Commuting Zones

The paper investigates whether and through which channels green public procurement (GPP) and the skills composition stimulate local environmental innovation capacity. We use detailed data sources on green patents and procurement expenditure at the level of US Commuting Zones for the period 2001-2011. We also check for the moderating effects of local labor market composition in the relation between GPP and green innovation capacity. Lastly, we test for differential effects of GPP on different classes of green technologies (GTs). The main finding is that GPP is an important driver for the local generation of GTs. High availability of abstract skills in the local workforce also drives the generation of GTs and magnifies the positive effect of GPP. When separated by type of GTs, we find evidence of a more pronounced effect of GPP on the local generation of mitigation, relative to adaptation, technologies.