Market response to environmental policy via public procurement: An empirical analysis of bids and prices

This paper studies the effect of Green Public Procurement (GPP) on competition, bids, and winning bids under two different regulation periods where the latter include more explicitly expressed GPP ambitions. Based on detailed data from Swedish internal cleaning service procurements, our results imply that environmental considerations might not influence the bids as required for GPP to be considered an effective environmental policy instrument. Over time, lower degree of competition and increased bids are found. This phenomenon can be attributed, at least in part, to regulatory influences, signifying an escalating complexity in the process of submitting bids.