Procuring Survival

Matilde Cappelletti, Leonardo M. Giuffrida and Gabriele Rovigatti

No 10124, CESifo Working Paper Series from CESifo

Abstract: We investigate the impact of public procurement spending on business survival. Using Italy as a laboratory, we construct a large-scale dataset on firms—covering balance-sheet, income-statement, and administrative records—and match it with public contract data. Employing a regression discontinuity design for close-call procurement auctions, we find that winners are more likely to stay in the market than marginal losers after the award and that the boost in survival chances lasts longer than the contract duration. We document that this effect is associated with earnings substitution rather than increased business scale. Regardless of size, contracts that are long-lasting and awarded by decentralized buyers are more impactful for survival prospects. Survivors experience no productivity premium but rather an improvement in their credit position.

Keywords: firm survival; firm dynamics; public demand; public procurement; demand shocks; productivity; credit; auctions; regression discontinuity design (search for similar items in EconPapers)
JEL-codes: D25 D44 H32 H57 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ent and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp10124.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Unavailable

Related works:
Journal Article: Procuring Survival (2024)
Working Paper: Procuring survival (2024)
Working Paper: Procuring Survival (2024)
Working Paper: Procuring survival (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_10124

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().