Econometric Analyses of Home Bias in Government Procurement

32 Pages Posted: 17 Jan 2015

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: February 2015

Abstract

The extent of discrimination in government procurement and its impact on economic efficiency has attracted both theoretical and analytical work, but little econometric evidence. We bridge this gap by building a new sector‐level dataset on domestic and foreign purchases by Japanese and Swiss governments over 1990–2003 to undertake “new” econometric analyses. Unlike previous work, we explain home‐bias using variables inspired by the political economy, trade‐macroeconomic and procurement literatures. We also provide “new” econometric evidence for previous theoretical predictions. Our results reveal the importance of domestic‐foreign productivity differences in governments’ cross‐border purchases and also support previous theoretical predictions. However, Membership of the World Trade Organizations's Agreement on Government Procurement is not found to increase market access.

Suggested Citation

Shingal, Anirudh, Econometric Analyses of Home Bias in Government Procurement (February 2015). Review of International Economics, Vol. 23, Issue 1, pp. 188-219, 2015, Available at SSRN: https://ssrn.com/abstract=2551102 or http://dx.doi.org/10.1111/roie.12164

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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