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Government Green Procurement Spillovers: Evidence from Municipal Building Policies in California

51 Pages Posted: 5 Sep 2012 Last revised: 15 May 2014

Timothy Simcoe

Boston University - Questrom School of Business; NBER

Michael W. Toffel

Harvard Business School

Multiple version iconThere are 2 versions of this paper

Date Written: May 14, 2014

Abstract

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.

Keywords: Public procurement, green building, quality certification, environmental policy

JEL Classification: L15, Q58, Q55, O33

Suggested Citation

Simcoe, Timothy and Toffel, Michael W., Government Green Procurement Spillovers: Evidence from Municipal Building Policies in California (May 14, 2014). Harvard Business School Technology & Operations Mgt. Unit Working Paper No. 13-030. Available at SSRN: https://ssrn.com/abstract=2142085 or http://dx.doi.org/10.2139/ssrn.2142085

Timothy S. Simcoe

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Michael W. Toffel (Contact Author)

Harvard Business School ( email )

Boston, MA 02163
United States
617.384.8043 (Phone)

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