Power, inclusion and the role of SMEs in European public procurement

Natalia Arias, Manuel J. García Rodríguez and Ana Yetano

Journal of Public Budgeting, Accounting & Financial Management, 2026, 1-27

Abstract: PurposeThis study examines small and medium-sized enterprise (SME) participation in European public procurement, aiming to understand disparities across member states despite harmonised EU Directives.Design/methodology/approachUsing a novel dataset of 839,778 tenders with information about SME participation from the Tenders Electronic Daily (TED) platform covering 29 countries from 2018 to 2023, we analyse SME participation rates, contract award shares, and geographic competition patterns.FindingsSignificant variation is observed: Eastern European countries exceed 80% SME participation, while several Western European countries remain below 40%. SMEs participate in about 80% of tenders but secure only 40–60% of contract values. Geographic proximity enhances SME competitiveness in local markets, especially for contracts under €500,000. Institutional and administrative factors appear more decisive than regulatory frameworks alone.Research limitations/implicationsLimitations include potential data quality issues. However, these were mitigated where possible, and the database remains the only available offering comparable data across Europe. Future research should explore institutional and cultural factors in greater depth through country-level studies.Practical implicationsPolicymakers should adopt tailored approaches addressing administrative complexity and regional market conditions, simplifying procedures and improving data transparency to boost SME inclusion.Social implicationsIdentifying ways to promote SME participation can support corrective actions that foster economic inclusion and strengthen local entrepreneurship across the EU.Originality/valueThis study provides new empirical evidence on the “implementation paradox” in EU public procurement, highlighting the need for context-specific strategies to enhance SME inclusion.

Keywords: Public procurement; Small and medium-sized enterprises (SMEs); European Union (EU); Inclusion; Competition; Policy (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jpbafm:jpbafm-06-2025-0169

DOI: 10.1108/JPBAFM-06-2025-0169

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