Can the private sector ensure the public interest?: evidence from federal procurement
In: Discussion paper No. 18-045
In: Corporate taxation and public finance
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In: Discussion paper No. 18-045
In: Corporate taxation and public finance
In: CESifo Working Paper No. 10775
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In: ZEW - Centre for European Economic Research Discussion Paper No. 22-030
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In: ZEW - Centre for European Economic Research Discussion Paper No. 21-093
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Public spending (i.e., 'G') enables governments to fulfill their fiscal policies. This paper takes a micro perspective and quantifies the impact of procurement spending - a specific component of G - on firm survival. We find that firms that receive public contracts survive longer, ceteris paribus, and that this effect accrues over time, reaching 20 percentage points after ten years. Our results are based on a novel dataset for Italy that combines balance sheet data on the universe of limited liability firms with administrative records on market entry and exit and quasi-universe of public contract data between 2008 and 2018. For construction auctions, we also rely on bid-level data to inform a regression discontinuity analysis. We find that the survival rate of winners relative to marginal losers is 70% higher after 36 months - or after two years and half of the median contract expiration. We explore several alternative channels that could rationalize our findings. We find that recipients do not become more productive, and their earnings become increasingly dependent on sales to public customers.
BASE
Does workload constitute a bottleneck to a public agency's mission, and if so, to what extent? We ask these questions in the context of the US government's procurement of R&D. We link tender, contract, patent, and office records to the identity of the officer responsible for the procurement process to estimate how workload in the federal acquisition unit affects the execution of R&D contracts. The identification comes from unanticipated retirement shifts among contracting officers, which we use to instrument workload. We find a large increase in patenting at the extensive margin when the same officer is exposed to a declining workload. In our sample, an additional contracting officer in the procurement unit, holding fixed the procurement budget and number of purchases, leads to a two percentage point increase in the probability for an R&D contract to generate patents. We provide suggestive evidence that backlogged contracting officers are unable to devote enough time to tender and contract specifications.
BASE
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In: ZEW - Centre for European Economic Research Discussion Paper No. 23-002
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In: ZEW - Centre for European Economic Research Discussion Paper No. 23-035
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In: NBER Working Paper No. w24201
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Working paper
In: Decarolis , F , de Rassenfosse , G , Giuffrida , L M , Iossa , E , Mollisi , V , Raiteri , E & Spagnolo , G 2021 , ' Buyers' role in innovation procurement: Evidence from US military R &D contracts ' , Journal of Economics & Management Strategy , vol. 30 , no. 4 , pp. 697-720 . https://doi.org/10.1111/jems.12430
This study provides the first quantification of buyers' role in the outcome of R&D procurement contracts. We combine together four data sources on US federal R&D contracts, follow-on patented inventions, federal public workforce characteristics, and perception of their work environment. By exploiting the observability of deaths of federal employees, we find that managers' death events negatively affect innovation outcomes: a 1% increase in the share of relevant public officer deaths causes a decline of 32.3% of patents per contract, 20.5% patent citations per contract, and 34.3% patent claims per contract. These effects are driven by the deaths occurring in the 6 months before the contract is awarded, thereby indicating the relevance of the design and award stage relative to ex post contract monitoring. Lower levels of self-reported within-office cooperation also negatively impact R&D outcomes.
BASE
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This study provides the first quantification of buyers' role in the outcome of R&D procurement contracts. We combine together four data sources on US federal R&D contracts, follow‐on patented inventions, federal public workforce characteristics, and perception of their work environment. By exploiting the observability of deaths of federal employees, we find that managers' death events negatively affect innovation outcomes: a 1% increase in the share of relevant public officer deaths causes a decline of 32.3% of patents per contract, 20.5% patent citations per contract, and 34.3% patent claims per contract. These effects are driven by the deaths occurring in the 6 months before the contract is awarded, thereby indicating the relevance of the design and award stage relative to ex post contract monitoring. Lower levels of self‐reported within‐office cooperation also negatively impact R&D outcomes.
BASE
In: CEPR Discussion Paper No. DP13777
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Working paper