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Firms in (Green) Pu...
Firms in (Green) Public Procurement : Financial Strength Indicators’ Impact on Contract Awards and Its Repercussion on Financial Strength
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- Baum, Christopher F. (author)
- Boston College, USA
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- Kordestani, Arash (author)
- Södertörns högskola,Företagsekonomi
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- Schaefer, Dorothea (author)
- DIW Berlin, Germany; Jönköping University, Sweden
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- Stephan, Andreas (author)
- Linnaeus University, Sweden
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(creator_code:org_t)
- Berlin : DIW Berlin, 2021
- English 23 s.
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In: SSRN Electronic Journal. - Berlin : DIW Berlin. - 1556-5068.
- Related links:
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https://doi.org/10.2...
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https://www.econstor...
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https://urn.kb.se/re...
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Abstract
Subject headings
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- We examine whether the financial strength of companies, in particular, small and medium-sizedenterprises (SMEs) is causally linked to the award of a public procurement contract (PP), especially inthe environmentally friendly “green” area (GPP). For this purpose, we build a combined procurementcompany data set from the Tenders Electronic Daily (TED) and the SME database AMADEUS, whichincludes ten European countries. First, we apply probit models to investigate whether the probabilityof winning the public tender depends on the company's financial strength. We then use theFlexpanel DiD approach to investigate the question of whether the award has an impact on thefuture financial strength of the successful company. On the one hand, we find that a lower equityratio and a higher short-term debt ratio increase the probability of being successful in a publictender. On the other hand, the success means that the companies can continue to work after theaward with a lower equity ratio than comparable companies without an award, regardless ofwhether the company was successful in a traditional or a “green” public tender. We conclude fromthis that the success in a PP is a substitute for one's own financial strength and thus facilitates accessto external financing. The estimation results differ depending on whether public procurement ingeneral or the sub-group of “green” public procurement is examined.
Subject headings
- SAMHÄLLSVETENSKAP -- Ekonomi och näringsliv -- Företagsekonomi (hsv//swe)
- SOCIAL SCIENCES -- Economics and Business -- Business Administration (hsv//eng)
Keyword
- Sustainable Finance
- Public Procurement
- Green Public Procurement
- Small and Mediumsized Companies
- Innovation
- Financial constraints
Publication and Content Type
- ref (subject category)
- rap (subject category)
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