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Public expenditure and international specialisation

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  • Brülhart, Marius
  • Trionfetti, Federico

Abstract

It is widely recognised that public-sector purchasers tend to discriminate in favour of domestic suppliers. We study the consequences of home-biased public procurement on international specialisation. In the theoretical analysis we find two effects. First, a country will specialise in the sector for which it has relatively large home-biased procurement (the "pull" effect). Second, home-biased procurement can counter agglomeration forces and thereby attenuate the overall degree of international specialisation (the "spread" effect). Our empirical analysis, conducted on input-output data for the European Union, yields supporting evidence for the pull effect and some support for the spread effect.

Suggested Citation

  • Brülhart, Marius & Trionfetti, Federico, 2001. "Public expenditure and international specialisation," HWWA Discussion Papers 141, Hamburg Institute of International Economics (HWWA).
    • Handle: RePEc:zbw:hwwadp:26299
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    Cited by:

    1. Sanguinetti, Pablo & Traistaru, Iulia & Volpe Martincus, Christian, 2004. "Economic integration and location of manufacturing activities: Evidence from MERCOSUR," ZEI Working Papers B 11-2004, University of Bonn, ZEI - Center for European Integration Studies.
    2. Brülhart, Marius & Trionfetti, Federico, 2009. "A test of trade theories when expenditure is home biased," European Economic Review, Elsevier, vol. 53(7), pages 830-845, October.
    3. Federico Trionfetti, 2015. "Public Debt and Economic Geography," International Regional Science Review, , vol. 38(1), pages 92-113, January.
    4. García-Alonso, María D.C. & Levine, Paul, 2008. "Strategic procurement, openness and market structure," International Journal of Industrial Organization, Elsevier, vol. 26(5), pages 1180-1190, September.
    5. Jürgen Von Hagen, 2007. "Institutionelle Gestaltung föderaler Systeme: Theorie und Empirie," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(2), pages 109-109, March.
    6. Cornelius Bähr & Ulrike Stierle‐von Schütz & Matthias Wrede, 2007. "Dezentralisierung in den EU‐Staaten und räumliche Verteilung wirtschaftlicher Aktivitäten," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(2), pages 110-129, March.
    7. Federica Calidoni, 2004. "Aggregate and Disaggregate Analysis of the Effects of Government Expenditure on Growth," Dundee Discussion Papers in Economics 160, Economic Studies, University of Dundee.
    8. Ulrike Stierle-von Schütz, 2005. "Fiscal Design and the Location of Economic Activity," ERSA conference papers ersa05p539, European Regional Science Association.

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    More about this item

    Keywords

    public expenditure; international specialisation; economic geography; European Union; input-output analysis;
    All these keywords.

    JEL classification:

    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • F1 - International Economics - - Trade
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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