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The Credit Channel of Public Procurement

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  • Ricardo Duque Gabriel

Abstract

Public procurement accounts for one third of government spending. In this paper, I document a new mechanism through which government procurement promotes firm growth: firms use procurement contracts to increase the amount of cash-flow based lending. I use Portuguese administrative data over 2009-2019 and exploit public contests as a source of quasi-exogenous variation in the award of procurement contracts.

Suggested Citation

  • Ricardo Duque Gabriel, 2022. "The Credit Channel of Public Procurement," GEE Papers 0171, Gabinete de Estratégia e Estudos, Ministério da Economia, revised Nov 2022.
  • Handle: RePEc:mde:wpaper:0171
    as

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    File URL: https://www.gee.gov.pt//RePEc/WorkingPapers/GEE_PAPERS_171.pdf
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    More about this item

    Keywords

    Credit; Collateral; Corporate Finance; Fiscal Policy; Public Procurement;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts

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