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Foreign participation in public procurement and firm performance: evidence from sub-Saharan Africa

Author

Listed:
  • Bernard Hoekman

    (EUI (Florence, Italy) and CEPR)

  • Marco Sanfilippo

    (University of Bari
    University of Antwerp)

Abstract

This paper exploits a firm-level dataset for nineteen sub-Saharan African countries that provides information on the share of total sales to government entities to provide new insights into the relative importance of participation in public procurement activity for different types of firms. The data suggest that foreign-owned firms often account for a large share of total public procurement, illustrating the importance of FDI as a channel to contest procurement markets. Participation in public procurement is positively associated with different measures of firm performance. This is most strongly the case for domestic firms, especially small companies, and firms engaged in manufacturing activities. The positive association increases with the share of foreign firms in total public procurement, suggesting more open policy environments enhance local competitiveness.

Suggested Citation

  • Bernard Hoekman & Marco Sanfilippo, 2020. "Foreign participation in public procurement and firm performance: evidence from sub-Saharan Africa," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(1), pages 41-73, February.
    • Handle: RePEc:spr:weltar:v:156:y:2020:i:1:d:10.1007_s10290-019-00357-y
    DOI: 10.1007/s10290-019-00357-y
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    Cited by:

    1. Stjepan Srhoj & Vanja Vitezic & Joachim Wagner, 2020. "Export boosting policies and firm behaviour: Review of empirical evidence around the world," Working Paper Series in Economics 395, University of Lüneburg, Institute of Economics.
    2. Tania Ghossein & Bernard Hoekman & Anirudh Shingal, 2021. "Public Procurement, Regional Integration, and the Belt and Road Initiative [How China Got Sri Lanka to Cough Up a Port]," The World Bank Research Observer, World Bank, vol. 36(2), pages 131-163.
    3. Bernard Hoekman & Anirudh Shingal & Varun Eknath & Viktoriya Ereshchenko, 2022. "COVID‐19, public procurement regimes and trade policy," The World Economy, Wiley Blackwell, vol. 45(2), pages 409-429, February.
    4. Bessonova, Evguenia, 2023. "Firms’ efficiency, exits and government procurement contracts," European Journal of Political Economy, Elsevier, vol. 76(C).
    5. Vassilis Kanellopoulos & Kostas Tsekouras, 2023. "Innovation efficiency and firm performance in a benchmarking context," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 137-151, January.
    6. Bernard Hoekman & Marco Sanfilippo & Filippo Santi, 2022. "Government Demand and Domestic Firms Growth: Evidence from Uganda," RSCAS Working Papers 2022/54, European University Institute.

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    More about this item

    Keywords

    Public procurement; Firm productivity; FDI; WTO Government Procurement Agreement; sub-Saharan Africa;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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