## 1 Introduction  
Public procurement (PP) strongly influences the private market. This influence can be substantial, given the overall size and volume of purchasing that moves through government procurement offices. PP accounts for 12% of gross domestic product (GDP) in OECD countries and even reaches 30% in many developing countries [1]. The estimated proportion of PP out of GDP in Europe is also significant: 16% in 2004 [2], 17-18% (around 2155 billion Euro) in 2008 [3], and 19.9% in 2009 [4]. PP accounted for 40% of spending on construction and almost 100% on defense, civil security, and emergency operations. The numbers may be even underestimated, and public procurement as a percentage of GDP in the US, the UK, Italy, and the Netherlands for 2017 and 2018 ranged between 19 and 24%, 13 and 56%, 3 and 10%, and 12 and 38%, respectively [5].  
PP has been developed to achieve not only purchasing goals but also horizontal aims including environmental protection and innovation promotion. The European Commission has recognized the synergetic development of eco-innovation and public procurement. The Eco-innovation Action Plan in 2011 confirmed that well-targeted policies, such as PP, could accelerate eco-innovation by creating stronger and more stable demand [6]. Green public procurement can generate dissemination of green technologies and environmental enhancement, and the adoption and fluctuation of this effectiveness are shaped by the quantity and the magnitude of the purchase [7]. However, the effect of PP on eco-innovation remains to be further tested and proved empirically.  
The combination of public procurement (PP), environmental protection, and innovation promotion is one essential creation of this research, with both theoretical and practical originalities and significance. Firstly, when implementing PP, the government takes the roles of regulator and customer at the same time, which makes PP policy a \"dual-impetus\" strategy. There are double rationales of demand-pull and regulatory effect when explaining the effectiveness of PP policy. Theoretically, the government can engage in PP policy more profoundly than other policies, thanks to its unique role as a buyer. Secondly, eco-innovation has \"double externalities\" of knowledge spillover and decreased environmental impact. That, on the one hand, makes it more difficult for private sectors to invest in eco-innovation than traditional innovations. On the other hand, we can also take it as an advantage to fully release the potential of regulations. Thirdly, based on the Porter Hypothesis, innovation is the key for environmental regulations to be effective on environmental performance in the long term. There are also many articles exploring firstly the effect of regulations on innovative activities or system changes and then the effect of innovation on environmental performance [8; 9].  
This study examines the impact of public procurement on innovations with environmental benefits in European companies based on the 2014 Community Innovation Survey (CIS) data and propensity score matching (PSM) model. The overall result indicates that companies winning a public contract are 5.7% more likely to achieve environmental benefits via innovations. What is more important is that the taxonomy of eco-innovation is introduced and the heterogeneous effects of PP on them are delineated. Moreover, this study perfectly matches firm size, cooperation partners, nation, and industrial sectors to investigate the differences in effect among company groups. The findings reveal that PP works more easily on innovation with environmental benefits obtained during the consumption and use of goods or services than those obtained within the enterprises. Small and large firms can be stimulated to be environmentally innovative rather than medium-sized companies. This research supports the impact of PP on eco-innovation and verifies the heterogeneity in effect among company groups.