Strategic procurement, openness and market structure
We examine strategic procurement behaviour by governments and its effect on market structure in sectors, such as defence and pharmaceuticals, where the government is the dominant consumer. In a world economy with trade between producer countries, and between producers and non-producers, we use a mod...
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| Veröffentlicht in: | International journal of industrial organization 2008-09, Vol.26 (5), p.1180-1190 |
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| container_title | International journal of industrial organization |
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| creator | García-Alonso, María D.C. Levine, Paul |
| description | We examine strategic procurement behaviour by governments and its effect on market structure in sectors, such as defence and pharmaceuticals, where the government is the dominant consumer. In a world economy with trade between producer countries, and between producers and non-producers, we use a modified Dixit–Stiglitz utility function with an independent taste for variety. There is free entry and exit by firms, but by anticipating their participation constraint governments can indirectly choose the number of domestic firms and their size through its choice of procurement price. Unlike the standard model with no independent taste for variety and no external sector of non-producer countries, there are incentives for subsidies, openness impacts on industrial structure and procurement coordination between producer countries affects firm numbers. |
| doi_str_mv | 10.1016/j.ijindorg.2007.12.003 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 0167-7187 |
| ispartof | International journal of industrial organization, 2008-09, Vol.26 (5), p.1180-1190 |
| issn | 0167-7187 1873-7986 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_36956873 |
| source | RePEc; Elsevier ScienceDirect Journals Complete |
| subjects | Defence and pharmaceutical sectors Defence industry Economic impact Economic policy Firm theory Global economy Market structure Openness Pharmaceutical industry Procurement Public-private partnership Purchasing Strategic planning Studies Transparency Utility functions |
| title | Strategic procurement, openness and market structure |
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