Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/312179 
Year of Publication: 
2024
Series/Report no.: 
ZEW Discussion Papers No. 24-060
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
Governments can support the green transition through green public procurement. Despite its strategic importance, the impact of this policy on firms remains unclear. Using US data, this paper provides the first empirical analysis of the causal effects of green contracts on corporate environmental and economic performance. We focus on an affirmative program for sustainable products, which represents one-sixth of the total federal procurement budget, and publicly traded firms, which account for one-third of total US emissions. Our results show that securing green contracts reduces emissions relative to firm size and increases productivity, with these effects persisting in the long run. We find no evidence that the program selects greener firms, nor that green public procurement sales crowd out private sales. We propose that increased R&D investment, incentivized by the program's requirements, is a key mechanism behind these improvements.
Subjects: 
Public Procurement
Environmental Policy
Firm Performance
Greenhouse Gas Emissions
R&D
Recycled materials
Staggered Difference-in-difference
JEL: 
D22
D44
H32
H57
Q53
Q54
Q58
Document Type: 
Working Paper

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