“…Second, as suggested by Ferraz et al (2015), firms winning procurement bids may benefit from learning mechanisms, insofar as winning a procurement contract allows them to better understand the dynamics of demand for their products, potentially feeding into growth along the extensive margin (penetrate new markets; obtain new clients). Third, government demand may incentivize pursuit of more risky activities, such as development and introduction of new (differentiated) products and new investments in R&D (Edler and Georghiou, 2007;Aschhoff et al, 2009;Slatchev and Wiederhold, 2016). Of course, these mechanisms may not apply equally to all types of firms and sectorsthe relationship will be heterogeneous, depending on firm characteristics.…”