Determinants of direct cross-border public procurement in EU Member States

The aim of this paper is to analyse the determinants of direct cross-border public procurement in the EU Member States. For this purpose, we use a unique dataset based on obligatory data published on TED (Tenders Electronic Daily) which covers public procurement contract award notices for the period 2008-2012 and consists of more than 30 variables. Among others, results of the econometric estimation suggest that the probability of awarding a contract cross-border depends positively on the value of the contract awarded and negatively on the number of offers. Among awarding country characteristics, GDP per capita and euro-area membership are found to positively impact the probability of a cross-border award, while population and the share of government expenditure in total GDP have a negative influence. Barriers to trade (a proxy of tariff and non-tariff barriers) are shown to have a significant negative impact on cross-border awards while investment freedom (a proxy of openness to FDI) is found to have a positive effect on the probability of a cross-border win.