Year: 2001
Type: article
Abstract: Public-sector purchases from private firms account for over 10 percent of GDP in most developed countries, and they are typically biased in favour of domestic suppliers.This paper explores the impact of discriminatory public procurement on the location of industries.Our main theoretical finding is that, in a setting with increasing returns and trade costs, home-biased procurement can override other determinants of industrial specialisation.Our empirical analysis underscores the significance of discriminatory procurement.Drawing on a cross-country, crossindustry data sample for the EU, we find that determinants of industry location such as factor endowments, market access and intermediate inputs are significant in sectors where public procurement is small, but they lose their significance in sectors where public procurement is important.
Source: Journal of Economic Integration
Authors: Marius Brülhart, Federico Trionfetti
Institutions: University of Lausanne, Queen's University Belfast
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W1968471680