Is green public procurement a deterrent for SMEs? Empirical evidence from France

Abstract

Public procurement can be defined as the process by which public contracting authorities purchase goods, services, and works from private suppliers, including small and medium enterprises (SMEs). The access of SMEs to public contracts is one of the objectives of public procurement policies, as they suffer from complex procedures and high transaction costs. At the same time, public procurement is increasingly being used as an instrument for environmental policies, through green clauses (i.e., mandatory specifications in the contract performance) and award criteria (i.e., the dimensions of the offers the contracting authority assesses). The objective of this empirical work is to determine whether environmental clauses and criteria have an impact on SME participation in award procedures. This paper assesses for the first time the compatibility between SME accessibility and environmental issues in public procurement with a dataset encompassing approximately 10,000 award procedures in France between 2022 and 2023. The findings indicate that green public procurement stimulates SME participation. The intensity of this effect may vary between environmental clauses and criteria across sectors, but there is no evidence of a deterrent effect of green public procurement on SMEs.