NSFC“计量建模与经济政策研究”基础科学中心学术交流报告会第六讲
报告题目：Local Favoritism in China’s Public Procurement: Information Friction or Incentive Distortion？
报告人：王媛，现为华东师范大学经济学院副教授、硕士生导师；2012年获浙江大学博士学位；2012-2014在复旦大学从事博士后研究。 主要研究领域是区域与城市经济学。入选上海市曙光、晨光人才计划，获高等学校科学研究优秀成果奖、上海市哲学社会科学优秀成果奖二等奖等。主持国家自然科学基金面上项目、青年项目等，论文发表于在China Economic Review、Journal of Real Estate Finance and Economics、Papers in Regional Science、《经济研究》《管理世界》等SSCI、CSSCI权威刊物。
时间：2022年12月22日（周四），10:00-11:30
地点：线上腾讯会议
摘要：More discretion can help local officials better exploit local information, or lead to the abuse of power for personal gains. Leveraging a comprehensive dataset of public procurements in China, we document strong local favoritism in the allocation of public contracts and examine the extent to which information friction and incentive distortion can explain this pattern. Drawing upon unique information on the winners and runners-up in each procurement, we find that the bid is 10% more likely to be won by local firms. Local bias incurs a significant efficiency loss, with the procurement cost being increased by 6.4%. The results are robust to controlling for bidder fixed effects. Information advantage cannot explain why local governments discriminate in favor of local firms. We find that local favoritism remains prominent in the procurement of relatively homogenous goods as well as among firms that have already won local contracts previously. Instead, we provide evidence supportive of career concern of local officials, who are strongly incentivized to stand out in the yardstick competition through local protectionism. Finally, we verify a variety of channels through which local governments manipulate the bidding process in favor of local firms: they tend to conduct less competitive procedures, set up more restrictive qualification requirements and manipulate subjective evaluation scores to screen out nonlocal bidders. Different from the literature that emphasizes the positive role of local discretion, our results imply that discretion may be excessive in settings with local officials facing strong political competition. To that end, more rules to limit local governments can be welfare improving.
