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Set-aside auctions and small businesses’ participation in public procurement: an empirical analysis

Author

Listed:
  • Gegam Shagbazian
  • Paola Valbonesi
  • Andrey Tkachenko
  • Elena Shadrina

Abstract

We investigate the effects of set-aside (SA) auctions supporting small business participation in public procurement, exploiting an original database of e-auctions for Russian granulated sugar (a largely homogeneous good) in the period 2011–2013. This affirmative action programme – as in many others similar and commonly adopted programmes by governments – records confounding effects. On the one hand, SA auctions attract more small business enterprises; on the other hand, SA auctions restrict the entry of possibly more cost-efficient large firms. Our findings highlight that SA auctions, on average, determine lower final prices for the procurer than non-SA (NSA) auctions do, although competition in SA auctions is not higher. We show that these findings depend on the reserve price intervals, supporting the effectiveness of SA auctions for small-scale procurement.

Suggested Citation

  • Gegam Shagbazian & Paola Valbonesi & Andrey Tkachenko & Elena Shadrina, 2026. "Set-aside auctions and small businesses’ participation in public procurement: an empirical analysis," Applied Economics, Taylor & Francis Journals, vol. 58(5), pages 889-903, January.
    • Handle: RePEc:taf:applec:v:58:y:2026:i:5:p:889-903
    DOI: 10.1080/00036846.2025.2460745
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