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Government Green Procurement Spillovers: Evidence from Municipal Building Policies in California

  • Timothy Simcoe


    (Boston University, School of Management)

  • Michael W. Toffel


    (Harvard Business School, Technology and Operations Management Unit)

We study how government green procurement policies influence private-sector demand for similar products. Specifically, we measure the impact of municipal policies requiring governments to construct green buildings on private-sector adoption of the US Green Building Council's Leadership in Energy and Environmental Design (LEED) standard. Using matching methods, panel data, and instrumental variables, we find that government procurement rules produce spillover effects that stimulate both private-sector adoption of the LEED standard and investments in green building expertise by local suppliers. These findings suggest that government procurement policies can accelerate the diffusion of new environmental standards that require coordinated complementary investments by various types of private adopter.

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Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 13-030.

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Length: 51 pages
Date of creation: Sep 2012
Date of revision: May 2014
Handle: RePEc:hbs:wpaper:13-030
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