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Firms’ Legality and Efficiency: Evidence from Public Procurement

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Abstract

Do firms with higher legality standards contribute to better procurement outcomes? We address this question in the context of Italian public works procurement, by combining contract-level data on procurement and firm-level data on legality scores, using the Legality Rating System managed by the Italian Antitrust Authority. We find that higher legality scores are positively associated with a significant and economically important improvement in procurement efficiency, measured by shorter time delays and lower extra costs.

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  • Elisabetta Iossa & Chiara Latour, 2025. "Firms’ Legality and Efficiency: Evidence from Public Procurement," CEIS Research Paper 592, Tor Vergata University, CEIS, revised 10 Feb 2025.
    • Handle: RePEc:rtv:ceisrp:592
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    References listed on IDEAS

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    2. Francesco Decarolis & Leonardo M Giuffrida & Elisabetta Iossa & Vincenzo Mollisi & Giancarlo Spagnolo, 2020. "Bureaucratic Competence and Procurement Outcomes [“Politics and Economics in Weak and Strong States]," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 36(3), pages 537-597.
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    More about this item

    Keywords

    Cartels; corruption; firm efficiency; legality; procurement;
    All these keywords.

    JEL classification:

    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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