Industrial Specialisation and Public Procurement: Theory and Empirical Evidence

Marius Brülhart and Federico Trionfetti

Economics Technical Papers from Trinity College Dublin, Economics Department

Abstract: This paper explores the impact of home-biased public procurement on the location of industries. It is shown theoretically and empirically that discriminatory procurement can offset other locational determinants. In the theoretical part, we demonstrate that a bias in public procurement towards domestically produced goods can counter agglomeration forces substantially. The empirical analysis draws on a cross-country, cross-industry data sample for the EU. In the full sample, the market-based determinants of industry location identified in the theory are significant in explaining EU industrial specialisation. However, these determinants lose statistical significance in the sub-sample of procurement-sensitive industries. In this sub-sample, proxies for the degree of liberalisation of public procurement relate positively to specialisation.

JEL-codes: F12 F15 H57 (search for similar items in EconPapers)
Date: 1998-01
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Citations: View citations in EconPapers (9)

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Journal Article: Industrial Specialisation and Public Procurement: Theory and Empirical Evidence (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:tcd:tcduet:983

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