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Firm performance and participation in public procurement: Evidence from Sub-Saharan Africa

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Abstract

This paper exploits a firm-level dataset for nineteen Sub-Sharan African countries that provides information on the share of total sales to government entities to provide new insights into the relative importance of participation in public procurement activity for different types of firms. We investigate whether participation in public procurement is associated with realization of the types of goals that underlie industrial policy – an improvement in measures of firm performance – and find that firms that sell a larger share of their output to government entities have better productivity performance. This is most strongly the case for domestically-owned firms, especially small companies, firms engaged in manufacturing activities and those located in the capital city. A positive relationship between participation in public procurement and performance is not observed for foreign-owned firms or companies that are in the service sector.

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  • Sanfilippo, Marco, 2018. "Firm performance and participation in public procurement: Evidence from Sub-Saharan Africa," CEPR Discussion Papers 12752, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:12752
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    Citations

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    Cited by:

    1. Cappelletti, Matilde & Giuffrida, Leonardo M., 2021. "Procuring survival," ZEW Discussion Papers 21-093, ZEW - Leibniz Centre for European Economic Research.
    2. Grover,Arti Goswami & Imbruno,Michele, 2020. "Using Experimental Evidence to Inform Firm Support Programs in Developing Countries," Policy Research Working Paper Series 9461, The World Bank.
    3. Bessonova, Evguenia, 2023. "Firms’ efficiency, exits and government procurement contracts," European Journal of Political Economy, Elsevier, vol. 76(C).
    4. Matilde Cappelletti & Leonardo M. Giuffrida & Gabriele Rovigatti, 2022. "Procuring Survival," CESifo Working Paper Series 10124, CESifo.
    5. Jonas Hjort & Golvine de Rochambeau & Vinayak Iyer & Fei Ao, 2020. "Informational Barriers to Market Access: Experimental Evidence from Liberian Firms," NBER Working Papers 27662, National Bureau of Economic Research, Inc.
    6. repec:spo:wpecon:info:hdl:2441/6jahov5tde8vt9aplqrgg3trl4 is not listed on IDEAS
    7. Bedri Kamil Onur Tas, 2020. "Effect of public procurement regulation on competition and cost-effectiveness," Journal of Regulatory Economics, Springer, vol. 58(1), pages 59-77, August.
    8. Tkachenko, Andrey, 2022. "State-business relations and access to external financing," BOFIT Discussion Papers 10/2022, Bank of Finland, Institute for Economies in Transition.
    9. Caravella, Serenella & Crespi, Francesco & Guarascio, Dario & Tubiana, Matteo, 2020. "Competitive strategies, heterogeneous demand sources and firms’ growth trajectories," GLO Discussion Paper Series 442, Global Labor Organization (GLO).
    10. Bedri Kamil Onur Tas, 2019. "Effect of Public Procurement Regulation on Competition and Cost-Effectiveness," RSCAS Working Papers 2019/22, European University Institute.
    11. repec:spo:wpmain:info:hdl:2441/6jahov5tde8vt9aplqrgg3trl4 is not listed on IDEAS
    12. Bedri Kamil Onur Tas, 2020. "Effect of Public Procurement Regulation on Competition and Cost-Effectiveness," RSCAS Working Papers 2020/36, European University Institute.
    13. repec:hal:wpspec:info:hdl:2441/6jahov5tde8vt9aplqrgg3trl4 is not listed on IDEAS
    14. Fadic, Milenko, 2018. "Government Procurement and the Growth of Small Firms," MPRA Paper 87015, University Library of Munich, Germany.
    15. Dina Dardir, 2020. "Does the R&D Public Procurement Matter for High-Tech Exports? Evidence from the USA," Post-Print hal-04048942, HAL.
    16. repec:zbw:bofitp:2022_010 is not listed on IDEAS
    17. repec:hal:spmain:info:hdl:2441/6jahov5tde8vt9aplqrgg3trl4 is not listed on IDEAS
    18. Tkachenko, Andrey, 2022. "State-business relations and access to external financing," BOFIT Discussion Papers 10/2022, Bank of Finland Institute for Emerging Economies (BOFIT).

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    More about this item

    Keywords

    Government demand; Firm performance; Productivity; Public procurement;
    All these keywords.

    JEL classification:

    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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