Foreign Market Access in Government Procurement: Evidence from Japan and Switzerland

36 Pages Posted: 18 Aug 2011 Last revised: 17 Sep 2012

See all articles by Anirudh Shingal

Anirudh Shingal

S.P. Jain Institute of Management & Research; European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); University of Bern - World Trade Institute

Date Written: September 1, 2012

Abstract

A home-bias in public purchases can have non-trivial efficiency effects, especially in times of crises. Using unexplored Japanese and Swiss public procurement data over 1990-2003, we examine the presence of a home-bias by controlling for the effect of macroeconomic, political economy, procurement-specific and domestic policy factors on governments’ sourcing decisions. We also provide an empirical test of Baldwin's (1970, 1984) "neutrality proposition" and of the effectiveness of the WTO's Agreement on Government Procurement (GPA) in increasing foreign market access. Our results suggest that Swiss public purchases may have been more discriminatory than the Japanese’s during this period. They also reveal the importance of procurement demand magnitude and domestic-foreign productivity differences in both governments' cross-border purchases. However, the expected impact of traditional macroeconomic variables, political budget cycles and public-private imports substitutability does not come through. Significantly, membership of the GPA is not found to increase foreign access to either country’s public markets.

Keywords: Government procurement, home-bias, market access, GPA, Japan, Switzerland

JEL Classification: F10, F13, F14, D72, H57

Suggested Citation

Shingal, Anirudh, Foreign Market Access in Government Procurement: Evidence from Japan and Switzerland (September 1, 2012). Available at SSRN: https://ssrn.com/abstract=1911804 or http://dx.doi.org/10.2139/ssrn.1911804

Anirudh Shingal (Contact Author)

S.P. Jain Institute of Management & Research ( email )

Munshi Nagar, Dadabhai Road
Andheri West
Mumbai, Maharashtra 119579
India

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

University of Bern - World Trade Institute ( email )

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Bern, 3012
Switzerland

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