Industrial Specialisation and Public Procurement: Theory and Empirical Evidence
AbstractThis 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 InfoPaper provided by Trinity College Dublin, Department of Economics in its series Economics Technical Papers with number 983.
Date of creation: Jan 1998
Date of revision:
Other versions of this item:
- Brülhart, Marius & Trionfetti, Federico, 2001. "Industrial Specialisation and Public Procurement: Theory and Empirical Evidence," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 106-127.
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- F15 - International Economics - - Trade - - - Economic Integration
- H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
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