The Economic Impact of CERN Procurement: Evidence from the Large Hadron Collider

21 Pages Posted: 16 Jul 2018 Last revised: 26 Jul 2018

See all articles by Massimo Florio

Massimo Florio

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM)

Paolo Castelnovo

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS)

Emanuela Sirtori

CSIL Centre for Industrial Studies

Lucio Rossi

Universita' Degli Studi Di Milano

Stefano Forte

University of Milan - Faculty of Science and Technology

Date Written: November 1, 2016

Abstract

Building the Large Hadron Collider (1995-2008) required frontier technologies. We wanted to discover whether there has been a long-term "learning by doing" effect on CERN suppliers' profitability, beyond the initial order. The evidence on this effect was until now fragmentary, mainly based on interviews or case histories. CERN granted us access to their LHC procurement database, including 1360 suppliers from 35 countries for a total of 11969 orders. We collected 23-year long time series of financial data (1991-2013) for a large sample of companies. After controlling for time fixed-effects and trends, firm-level and country-level possible confounding factors, we observe a statistically significant (p<0.01) 'CERN effect' on long-run profit margin of high-tech suppliers, while the effect on non-high-tech suppliers is not statistically significant.

Keywords: CERN, Large Hadron Collider, technological spillovers, supply chain

Suggested Citation

Florio, Massimo and Castelnovo, Paolo and Sirtori, Emanuela and Rossi, Lucio and Forte, Stefano, The Economic Impact of CERN Procurement: Evidence from the Large Hadron Collider (November 1, 2016). Available at SSRN: https://ssrn.com/abstract=3202209 or http://dx.doi.org/10.2139/ssrn.3202209

Massimo Florio (Contact Author)

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM) ( email )

Via Conservatorio 7
I-20122 Milano, 20122
Italy
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+39 02 50321505 (Fax)

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Paolo Castelnovo

Università degli Studi di Milano-Bicocca - Center for Interdisciplinary Studies in Economics, Psychology & Social Sciences (CISEPS) ( email )

Piazza dell'Ateneo Nuovo, 1
Milano, 20126
Italy

Emanuela Sirtori

CSIL Centre for Industrial Studies

Corso Monforte 15
Milano, 20122
Italy

Lucio Rossi

Universita' Degli Studi Di Milano ( email )

VIA FESTA DEL PERDONO 7
MILAN, 20122
Italy

Stefano Forte

University of Milan - Faculty of Science and Technology

Via Festa del Perdono, 7
Milan
Italy

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