The impact of public procurement on market competition: evidence from South Korea

Abstract

This study explores the effects of public procurement on market competition. We examined the gasoline and diesel price impacts of the joint oil purchase policy implemented by the Korean Public Procurement Service in the public sector, as an example of public procurement. Using administrative data from all retail gas stations, we found that the policy increased the retail price of oil products at public procurement contract gas stations, indicating that public procurement can have negative effects on market competition.