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Industrial Specialisation and Public Procurement: Theory and Empirical Evidence

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  • Brülhart, Marius
  • Trionfetti, Federico

Abstract

This paper explores the impact of home-biased public procurement on the location of industries. It is shown theoretically and empirically that discriminatory procurement can offset other locational determinants. In the theoretical part, we demonstrate that a bias in public procurement towards domestically produced goods can counter agglomeration forces substantially. The empirical analysis draws on a cross-country, cross-industry data sample for the EU. In the full sample, the market-based determinants of industry location identified in the theory are significant in explaining EU industrial specialisation. However, these determinants lose statistical significance in the sub-sample of procurement-sensitive industries. In this sub-sample, proxies for the degree of liberalisation of public procurement relate positively to specialisation.

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Bibliographic Info

Paper provided by Trinity College Dublin, Department of Economics in its series Economics Technical Papers with number 983.

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Date of creation: Jan 1998
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Handle: RePEc:tcd:tcduet:983

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Postal: Trinity College, Dublin 2
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Web page: http://www.tcd.ie/Economics/
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Cited by:
  1. Rolf Weder, 2003. "Comparative home-market advantage: An empirical analysis of British and American exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 139(2), pages 220-247, June.
  2. Gianmarco I.P. Ottaviano, 2001. "Footloose Capital, Market Access, and the Geography of Regional State Aid," Development Working Papers 155, Centro Studi Luca d\'Agliano, University of Milano.
  3. Federico Trionfetti, 1999. "On the home market effect: theory and empirical evidence," LSE Research Online Documents on Economics 20215, London School of Economics and Political Science, LSE Library.
  4. Marius Brulhart & Federico Trionfetti, 2000. "Home-Biased Demand and International Specialisation: A Test of Trade Theories," Econometric Society World Congress 2000 Contributed Papers 0031, Econometric Society.
  5. Shingal, Anirudh, 2013. ""New" econometric evidence for the Baldwin-Richardson (1972)/Miyagiwa (1991) theoretical predictions in government procurement," MPRA Paper 49138, University Library of Munich, Germany.
  6. Pierre M. Picard & Dao-Zhi Zeng, 2009. "A Harmonization of First and Second Natures," CREA Discussion Paper Series 09-10, Center for Research in Economic Analysis, University of Luxembourg.
  7. Eric Strobl, 2004. "Trends and Determinants of the Geographic Dispersion of Irish Manufacturing Activity, 1926- 1996," Regional Studies, Taylor & Francis Journals, vol. 38(2), pages 191-205.
  8. F Trionfetti, 1999. "On the Home Market Effect: Theory and Empirical Evidence," CEP Discussion Papers dp0430, Centre for Economic Performance, LSE.

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