Extensions¶
IPCA-Deflated Real Prices¶
Using IPCA-deflated (real) prices yields patterns virtually identical to the nominal results, confirming that the price effects reflect real differences in procurement costs rather than differential inflation across product groups.
Extensive Margin: Tender Completion¶
The probability that a procurement item is successfully completed may also be affected by the policy. Point estimates suggest that open tenders may improve completion rates, though the effects are less precisely estimated due to the use of group-level (rather than item-level) fixed effects.
Procurement Efficiency¶
Procurement efficiency, measured as the ratio of the final negotiated price to the government's reference price, improves under open tenders. Lower ratios indicate that the government obtained better deals relative to its own expectations.
Winner Composition¶
The probability that the winning firm is an SME decreases under open tenders, directly supporting the competition mechanism: open tenders attract larger firms that outbid SMEs on price.
Heterogeneity by PBU Type¶
Interacting the treatment indicator with a direct administration dummy reveals broadly similar effects across buyer types (direct administration vs. indirect administration entities), suggesting that the competition channel operates consistently across the institutional landscape.
Fiscal Cost Quantification¶
A back-of-the-envelope calculation using the estimated price effect and the total procurement volume for group 65 in the pre-period quantifies the fiscal burden of SME-only tenders.
| Component | Baseline spec. | PBU FE spec. |
|---|---|---|
| Price coefficient (18m) | -0.1309 | -0.1330 |
| Implied price effect | -12.27% | -12.45% |
| G65 pre-period total value | R$ 689.0 million | R$ 689.0 million |
| Estimated fiscal saving | R$ 84.5 million | R$ 85.8 million |
R$ 84.5--85.8 million Estimated fiscal cost of restricting tenders to SMEs for group 65 in the pre-period (18-month window)
The calculation applies the percentage price effect (\(e^{\beta} - 1\)) to the total procurement value of group 65 completed items in the pre-period (Sep 2016--Feb 2018). This is a conservative estimate as it considers only one product group; extrapolating to all groups subject to SME restrictions would yield substantially larger figures. These fiscal costs reinforce the conclusion that policymakers should carefully weigh the benefits of SME promotion against the efficiency losses in public procurement.