Unravelling SMEs’ participation and success in public procurement

Carmela Di Mauro, Alessandro Ancarani and Tara Hartley

Journal of Public Procurement, 2020, vol. 20, issue 4, 377-401

Abstract: Purpose - This paper aims to investigate the role of micro, small and medium enterprises (MSMEs) within the Canadian public procurement, by seeking to identify barriers and supporting factors of MSMEs’ participation and success in public tenders. Design/methodology/approach - The empirical analysis builds on a unique survey run by the Canadian federal government, which addressed firms either participating or not participating in public tenders. Model estimation on the survey data relies on sample selection methodologies, which allow separating determinants of MSMEs’ decision to participate from determinants of success. Findings - Results provide evidence that costs stemming from asset specificity and uncertainty (e.g. costs of bidding, requirements for participation, bundling of contracts and award rules based on minimum price) affect participation in public procurement. Within MSMEs, micro-firms are the most discouraged from participating. However, after controlling for factors affecting participation, micro-firms emerge as having a higher success rate, possibly because of high specialization and joint participation with larger firms. Research limitations/implications - Because of the cross-sectional nature of the data used for hypotheses testing, endogeneity may arise ifex postvariables affectex antedecisions. This may apply if participation in procurement feeds on success in past tenders. Social implications - Findings may inform policies for the inclusion of smaller firms in the public marketplace. Originality/value - To the best of the authors’ knowledge, this study is the first attempting to disentangle determinants of participation in public tenders from determinants of success. Separating the two aspects helps fine-tune SME-friendly public procurement policies, by identifying actions that effectively facilitate success of MSMEs in public tenders.

Keywords: Participation; Survey; SMEs; Public procurement; Public purchasing; Public tenders (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
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:eme:jopppp:jopp-03-2018-0013

DOI: 10.1108/JOPP-03-2018-0013

Access Statistics for this article

Journal of Public Procurement is currently edited by Mr David Loseby

More articles in Journal of Public Procurement from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().