Sofia Patsali (Université Côte d’Azur)

AI and hospital suppliers

Abstract. In line with the innovation procurement literature, this work investigates the impact of becoming a supplier of a national network of excellence regrouping French hospitals on the supplier’s innovative performance. It investigates whether a higher information flow from hospitals to suppliers, proxied by the supply of AI-powered medical equipment, is associated with higher innovative performance. Our empirical analysis relies on a dataset combining unprecedented granular data on procurement bids and equipment with patent data to measure the firm’s innovative performance. To identify the firm’s innovative activities relevant to the bid, we use an advanced neural network algorithm for text analysis linking firms’ equipment descriptions with relevant patent documents. Our results show that firms becoming hospital suppliers have a significantly higher propensity to innovate. About the mechanism, we show that supplying AI-powered equipment further boosts the suppliers’ innovative performance, and this raises potential important policy implications.

Joint with Michele Pezzoni and Jackie Krafft