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

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  • Timothy Simcoe

    () (Boston University, School of Management)

  • Michael W. Toffel

    () (Harvard Business School, Technology and Operations Management Unit)

Abstract

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.

Suggested Citation

  • Timothy Simcoe & Michael W. Toffel, 2012. "Government Green Procurement Spillovers: Evidence from Municipal Building Policies in California," Harvard Business School Working Papers 13-030, Harvard Business School, revised May 2014.
  • Handle: RePEc:hbs:wpaper:13-030
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    Cited by:

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    2. Kube, Roland & von Graevenitz, Kathrine & Löschel, Andreas & Massier, Philipp, 2019. "Do voluntary environmental programs reduce emissions? EMAS in the German manufacturing sector," Energy Economics, Elsevier, vol. 84(S1).
    3. Shan Zhou & Douglas S. Noonan, 2019. "Justice Implications of Clean Energy Policies and Programs in the United States: A Theoretical and Empirical Exploration," Sustainability, MDPI, Open Access Journal, vol. 11(3), pages 1-20, February.
    4. Takuro Miyamoto & Naonari Yajima & Takahiro Tsukahara & Toshi H. Arimura, 2020. "Advancement of Green Public Purchasing by Category: Do Municipality Green Purchasing Policies Have Any Role in Japan?," Sustainability, MDPI, Open Access Journal, vol. 12(21), pages 1-24, October.
    5. Yayun Shen & Michael Faure, 0. "Green building in China," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 0, pages 1-17.
    6. Annamaria Conti & Stuart J. H. Graham, 2020. "Valuable Choices: Prominent Venture Capitalists’ Influence on Startup CEO Replacements," Management Science, INFORMS, vol. 66(3), pages 1325-1350, March.
    7. Christopher J. Blackburn & Mallory E. Flowers & Daniel C. Matisoff & Juan Moreno‐Cruz, 2020. "Do Pilot and Demonstration Projects Work? Evidence from a Green Building Program," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(4), pages 1100-1132, September.
    8. Shengguo Xu & Chunli Chu & Meiting Ju & Chaofeng Shao, 2016. "System Establishment and Method Application for Quantitatively Evaluating the Green Degree of the Products in Green Public Procurement," Sustainability, MDPI, Open Access Journal, vol. 8(9), pages 1-12, September.
    9. Ana R. Leal & David Perez-Castillo & José Ernesto Amorós & Bryan W. Husted, 2020. "Municipal Green Purchasing in Mexico: Policy Adoption and Implementation Success," Sustainability, MDPI, Open Access Journal, vol. 12(20), pages 1-26, October.
    10. Rinne, Sonja, 2018. "Radioinactive: Are nuclear power plant outages in France contagious to the German electricity price?," CIW Discussion Papers 3/2018, University of Münster, Center for Interdisciplinary Economics (CIW).
    11. Ionela Corina Chersan & Valentin Florentin Dumitru & Cãtãlina Gorgan & Vasile Gorgan, 2020. "Green Public Procurement in the Academic Literature," The AMFITEATRU ECONOMIC journal, Academy of Economic Studies - Bucharest, Romania, vol. 22(53), pages 1-82, February.
    12. Marc Rysman & Timothy Simcoe & Yanfei Wang, 2020. "Differentiation Strategies in the Adoption of Environmental Standards: LEED from 2000 to 2014," Management Science, INFORMS, vol. 66(9), pages 4173-4192, September.
    13. Jun Li & Di (Andrew) Wu, 2020. "Do Corporate Social Responsibility Engagements Lead to Real Environmental, Social, and Governance Impact?," Management Science, INFORMS, vol. 66(6), pages 2564-2588, June.
    14. Nuril Izzeaty Ishak & Ernawati Mustafa Kamal & Nor’Aini Yusof, 2017. "The Green Manufacturer’s Compliance With Green Criteria Throughout the Life Cycle of Building Material," SAGE Open, , vol. 7(3), pages 21582440177, August.
    15. Mallory Elise Flowers & Daniel C. Matisoff & Douglas S. Noonan, 2020. "In the LEED: Racing to the Top in Environmental Self‐Regulation," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2842-2856, September.
    16. Zhang, Li & Wu, Jing & Liu, Hongyu, 2018. "Policies to enhance the drivers of green housing development in China," Energy Policy, Elsevier, vol. 121(C), pages 225-235.
    17. Cezar-Petre Simion & Ciprian Nicolescu & Mihai Vrîncuț, 2019. "Green Procurement in Romanian Construction Projects. A Cluster Analysis of the Barriers and Enablers to Green Procurement in Construction Projects from the Bucharest-Ilfov Region of Romania," Sustainability, MDPI, Open Access Journal, vol. 11(22), pages 1-25, November.
    18. Lela Mélon, 2020. "More Than a Nudge? Arguments and Tools for Mandating Green Public Procurement in the EU," Sustainability, MDPI, Open Access Journal, vol. 12(3), pages 1-24, January.

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    More about this item

    Keywords

    Public procurement; green building; quality certification; environmental policy;
    All these keywords.

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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