Government Green Procurement Spillovers: Evidence from Municipal Building Policies in California
Boston University - School of Management; NBER
Michael W. Toffel
Harvard Business School (HBS) - Technology & Operations Management Unit
May 14, 2014
Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 13-030
We study how government green procurement policies influence private-sector demand for similar products. Specifically, we measure the impact of municipal policies requiring governments to construct green buildings on private-sector adoption of the US Green Building Council's Leadership in Energy and Environmental Design (LEED) standard. Using matching methods, panel data, and instrumental variables, we find that government procurement rules produce spillover effects that stimulate both private-sector adoption of the LEED standard and investments in green building expertise by local suppliers. These findings suggest that government procurement policies can accelerate the diffusion of new environmental standards that require coordinated complementary investments by various types of private adopter.
Number of Pages in PDF File: 51
Keywords: Public procurement, green building, quality certification, environmental policy
JEL Classification: L15, Q58, Q55, O33
Date posted: September 5, 2012 ; Last revised: May 15, 2014
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