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Markups and Public Procurement

MSs thesis, Stockholm School of Economics. DOI: hhs.primo.exlibrisgroup.com

Abstract:

This paper analyzes the effect of public procurement on firm markups, using a panel dataset of Czech construction firms from 2006 to 2021. Markups are estimated through a structural framework, while biases are addressed using a selection on observables design and models for unobserved factors. Propensity score-based estimations indicate that firm markups increase by approximately 15% during contract years. A temporal analysis, employing synthetic control and matrix completion methods, reveals that treatment effects decline from around 30% in 2006 to 10% in 2021. These patterns are consistent with institutional improvements in the Czech Republic and offer empirical evidence of increasing efficiency in public spending.

Bachelor's thesis, Charles University in Prague. DOI: dspace.cuni.cz

For my undergraduate thesis, I estimated production functions for firms in the Czech construction sector, addressing endogeneity in productivity shocks and variable input usage using the control function approach and GMM. A key contribution of this work was the creation of a novel dataset as well as the structural inference of the markup distribution.

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