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The Role of Buyer Power in Public Procurement Auctions: An Empirical Analysis

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  • Strömbäck, Elon

    (Department of Economics, Umeå School of Business and Economics)

Abstract

Throughout the world, green public procurement (GPP) has become an established environmental policy instrument. Advocates of this purchasing policy argue that the public sector can use its buyer power to incentivize industries into becoming less environmentally damaging. I study how GPP is organized in Sweden and the potential supplier’s response to varying buyer market shares. The level of GPP stringency is found to vary systematically with authority type, buyer market share, and political coalition in the relevant council or the Swedish Parliament. The results indicate quite substantial dispersion in GPP stringency and suggest a low degree of coordination when implementing the policy. After controlling for GPP stringency and other covariates, buyer market share is positively associated with the probability of potential suppliers submitting a bid.

Suggested Citation

  • Strömbäck, Elon, 2015. "The Role of Buyer Power in Public Procurement Auctions: An Empirical Analysis," Umeå Economic Studies 913, Umeå University, Department of Economics.
    • Handle: RePEc:hhs:umnees:0913
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    File URL: http://www.usbe.umu.se/enheter/econ/ues/ues913/
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    More about this item

    Keywords

    Environmental policy; Regulation; Compliance cost; Endogenous entry; Buyer market share; Supplier incentives;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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