Government Purchases and Firm Growth: Evidence from South Korea's Public Procurement Market
Friday, May 18, 201812:00 PM - 1:15 PM (Pacific)
Encina Hall, Third Floor, Central, C330
616 Jane Stanford Way, Stanford, CA 94305
Public procurement accounts for a substantial portion of the taxpayers' money: approximately 12% of GDP and 29% of government expenditure in OECD countries. Governments are expected to carry it out efficiently and with high standards of conduct to ensure sustainable growth. In this talk, Lee will explain the unique auction system in South Korea's public procurement market, and discuss how government purchases can lead firms and the economy to grow. Firms that obtain short term public procurement contracts experience increased growth and activity, above the effects of the activity associated with the public contract, and this is observed especially among small, young and financially-constrained firms. Lee will also draw policy implications from those findings.