Analysis of regulatory thresholds and productivity in public procurement

Abstract

We describe the legal framework for public procurement in Spain. Operating with a data set of contracts, we observe notorious spikes near the thresholds, which adjust rapidly to legislative modifications. We use firm-level data to produce a measure of firm-productivity. Additionally, we merge both data sets and obtain the following findings. First, winning firms are more productive than the average firm. Second, the open procedure might not lead to contracting with more productive firms - we discuss some possible explanations for this phenomenon-. Third, negotiated procedures increase the likelihood of allocating the contract to a company from the same territorial area as the contracting authority.