SMEs Performance in Public Procurement and the Italian Legality Rating 

Abstract

This study investigates the impact of the Italian Legality Rating (LR) on small and medium enterprises (SMEs) in public procurement. The LR, issued by the Italian Antitrust Authority, evaluates firms based on fiscal transparency, anti-corruption practices, corporate responsibility, and sustainability. While larger firms are more likely to obtain higher LR scores, SMEs benefit significantly from holding the certification. Using firm-level data and a Regression Discontinuity Design, we find that the LR increases SMEs' tender-winning probabilities by 12.9 percentage points, highlighting its role as a strong institutional signal. Our findings emphasize the LR's potential to enhance SME competitiveness in public procurement.

Keywords: SMEs, Legality Rating, Public Procurement