The Economic Impact of CERN Procurement: Evidence from the Large Hadron Collider
21 Pages Posted: 16 Jul 2018 Last revised: 26 Jul 2018
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
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