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

Elon Strömbäck ()
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Elon Strömbäck: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden

No 913, Umeå Economic Studies from Umeå University, Department of 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.

Keywords: Environmental policy; Regulation; Compliance cost; Endogenous entry; Buyer market share; Supplier incentives (search for similar items in EconPapers)
JEL-codes: D78 H57 O38 Q58 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2015-09-15
New Economics Papers: this item is included in nep-env, nep-ind and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:umnees:0913

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