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Industrial Specialisation and Public Procurement: Theory and Empirical Evidence

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  • Brülhart, Marius
  • Trionfetti, Federico

Abstract

This paper explores the impact of home-biased public procurement on the location of industries. It is shown theoretically and empirically that discriminatory procurement can offset other locational determinants. In the theoretical part, we demonstrate that a bias in public procurement towards domestically produced goods can counter agglomeration forces substantially. The empirical analysis draws on a cross-country, cross-industry data sample for the EU. In the full sample, the market-based determinants of industry location identified in the theory are significant in explaining EU industrial specialisation. However, these determinants lose statistical significance in the sub-sample of procurement-sensitive industries. In this sub-sample, proxies for the degree of liberalisation of public procurement relate positively to specialisation.

Suggested Citation

  • Brülhart, Marius & Trionfetti, Federico, 1998. "Industrial Specialisation and Public Procurement: Theory and Empirical Evidence," Economics Technical Papers 983, Trinity College Dublin, Department of Economics.
  • Handle: RePEc:tcd:tcduet:983
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    Cited by:

    1. Zornitsa Kutlina-Dimitrova & Csilla Lakatos, 2016. "Determinants of direct cross-border public procurement in EU Member States," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(3), pages 501-528, August.
    2. Marius BRÜLHART & Federico TRIONFETTI, 1999. "Home-Biased Demand and International Specialisation : A Test of Trade Theories," Cahiers de Recherches Economiques du Département d'Econométrie et d'Economie politique (DEEP) 9918, Université de Lausanne, Faculté des HEC, DEEP.
    3. Trionfetti, Federico, 1999. "On the home market effect: theory and empirical evidence," LSE Research Online Documents on Economics 20215, London School of Economics and Political Science, LSE Library.
    4. Gianmarco I.P. Ottaviano, 2004. "Footloose capital, market access and the geography of regional state aid," Chapters,in: Multinational Firms’ Location and the New Economic Geography, chapter 8 Edward Elgar Publishing.
    5. Rolf Weder, 2003. "Comparative home-market advantage: An empirical analysis of British and American exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 139(2), pages 220-247, June.
    6. Pierre M. Picard & Dao‐Zhi Zeng, 2010. "A Harmonization Of First And Second Natures," Journal of Regional Science, Wiley Blackwell, vol. 50(5), pages 973-994, December.
    7. Kutlina-Dimitrova, Zornitsa, 2017. "Can we put a price on extending the scope of the GPA? First quantitative assessment," DG TRADE Chief Economist Notes 2017-1, Directorate General for Trade, European Commission.
    8. Chiara Carboni & Elisabetta Iossa & Gianpiero Mattera, 2017. "Barriers to Public Procurement: A Review and Recent Patterns in the EU," IEFE Working Papers 92, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    9. Shingal, Anirudh, 2013. ""New" econometric evidence for the Baldwin-Richardson (1972)/Miyagiwa (1991) theoretical predictions in government procurement," MPRA Paper 49138, University Library of Munich, Germany.
    10. Eric Strobl, 2004. "Trends and Determinants of the Geographic Dispersion of Irish Manufacturing Activity, 1926- 1996," Regional Studies, Taylor & Francis Journals, vol. 38(2), pages 191-205.
    11. Shingal, Anirudh, 2012. "Exploring foreign market access in government procurement," Papers 305, World Trade Institute.
    12. Herz, Benedikt & Varela-Irimia, Xosé-Luís, 2016. "Border Effects in European Public Procurement," MPRA Paper 76401, University Library of Munich, Germany, revised 24 Jan 2017.

    More about this item

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F15 - International Economics - - Trade - - - Economic Integration
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement

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