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Border effects, Procurement and Productivity

19th National Competition for Economic Research Grants

Economic analysis

Senior Researcher : Manuel José García-Santana

Research Centre or Institution : Universitat Pompeu Fabra. Barcelona

Abstract

The European Commission is making a big effort to integrate procurement markets of member states. However, cross-border participation is still astonishing low. In the year 2010, for instance, less than 2% of the contracts (and less the 5% of the value of contracts) were awarded to foreign firms in countries like Italy, France, Spain, Portugal, or the UK.

The main goals of this project will be to answer the following questions:

(1) Why is cross- country, region, and province participation so low in public procurement?

(2) Are governments responsible for it?

(3) What are the effects of this phenomenon on aggregate productivity and welfare?

In this project, we will use recently available datasets to document novel facts and discipline general equilibrium models that will help us to answer these questions. The novelty of the data and the complex interactions between public procurement outcomes, economic distortions and firms’ decisions make this research project ambitious and place it at the research frontier. 

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