Doctor of Philosophy, The Ohio State University, 2009, Economics
Spending approximately 10 percent of the gross domestic product (GDP), governments are the biggest buyer of goods and services for many countries. Sound public procurement policies and practices are essential not only to good governance, but also to a strong and stable economy. On the other hand, due to the fact that more than 99 percent of all businesses are small in most of the countries, the involvement of small businesses are vital for the governments seeking to establish competition, innovation and value for money in the delivery of public goods and services. In fact, small businesses are likely to be disadvantage in production costs and lack in knowledge of available contract opportunities. Moreover, since it naturally would fit better to the small businesses, many of them serve to government contracts as subcontractor. In this thesis, I analyze public procurement auctions both empirically and theoretically, focusing on the role and impact of small businesses in government procurement market. To level the playing field for businesses seeking to bid for public sector contracts, many governments adopt small business programs and provide contract opportunities for businesses operated by members of disadvantaged groups. The federal government, for instance, has its goal of awarding 23 percent of its contracting dollars to small businesses. The redistribution arising from such programs, however, can introduce significant added costs to government procurement budgets. In my first essay “Small Business Set-asides in Procurement Auctions: An Empirical Analysis,” I examine to what extent small business set-asides increase government procurement costs, and how set-asides promote access of the beneficiaries to procurement markets. The estimates employ data on Japanese public construction projects, where approximately 50 percent of the procurement budget is set-aside for small and medium enterprises (SMEs). Using nonparametric estimation of asymmetric first-price auctions (open full item for complete abstract)
Committee: Howard Marvel P. (Committee Chair); Lixin Ye (Committee Member); Matthew Lewis S. (Committee Member)
Subjects: Economics