Public expenditure and international specialisation

Marius Brülhart and Federico Trionfetti

No 141, HWWA Discussion Papers from Hamburg Institute of International Economics (HWWA)

Abstract: It is widely recognised that public-sector purchasers tend to discriminate in favour of domestic suppliers. We study the consequences of home-biased public procurement on international specialisation. In the theoretical analysis we find two effects. First, a country will specialise in the sector for which it has relatively large home-biased procurement (the "pull" effect). Second, home-biased procurement can counter agglomeration forces and thereby attenuate the overall degree of international specialisation (the "spread" effect). Our empirical analysis, conducted on input-output data for the European Union, yields supporting evidence for the pull effect and some support for the spread effect.

Keywords: public expenditure; international specialisation; economic geography; European Union; input-output analysis (search for similar items in EconPapers)
JEL-codes: F1 H5 R15 R3 (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Public Expenditure and International Specialisation (2001)
Working Paper: Public Expenditure and International Specialisation (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:hwwadp:26299

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