Scandinavian Working Papers in Economics
Umeå Economic Studies,
Umeå University, Department of Economics
No 913: The Role of Buyer Power in Public Procurement Auctions: An Empirical Analysis
Elon Strömbäck ()
Additional contact information
Elon Strömbäck: Department of Economics, Umeå School of Business and Economics, Postal: Umeå University, S 901 87 Umeå, Sweden
Abstract: Throughout the world, green public procurement (GPP) has become an established environmental policy instrument. Advocates of this purchasing policy argue that the public sector can use its buyer power to incentivize industries into becoming less environmentally damaging. I study how GPP is organized in Sweden and the potential supplier’s response to varying buyer market shares. The level of GPP stringency is found to vary systematically with authority type, buyer market share, and political coalition in the relevant council or the Swedish Parliament. The results indicate quite substantial dispersion in GPP stringency and suggest a low degree of coordination when implementing the policy. After controlling for GPP stringency and other covariates, buyer market share is positively associated with the probability of potential suppliers submitting a bid.
Keywords: Environmental policy; Regulation; Compliance cost; Endogenous entry; Buyer market share; Supplier incentives
33 pages, September 15, 2015
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http://www.usbe.umu.se/enheter/econ/ues/ues913/
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