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Open auctions pull in geographically distant non-SME suppliers

Intuition (plain-language)

A distant supplier only bids when the prize is big enough to cover the freight. So when group 65 opened up, the extra distance shows up only on high-value items (about 12 km farther) and is invisible on small ones (about 3 km, not significant). That value-margin asymmetry is exactly what a transport-cost story predicts: non-SMEs have wider reach but deploy it selectively, where contract size absorbs the logistics.

Reduced-form motivation layer

The headline number on this page comes from the v1–v4 reduced-form DiDiR pipeline. The v8 manuscript carries this as motivation in §1 but does not headline it; the v8 canonical claim is the structural decomposition — see Exclusion dominates the price decomposition and Static welfare cost ~28.9%.

🟡 On high-value items in switched group 65, opening to non-SME bidders widens the average buyer-winner distance by +12.1 km (p<0.01, item-clustered SEs), identified by DiDiR (AN-003). On low-value items the effect is null (+2.8 km, p>0.10). The asymmetry along the value margin is consistent with the transport-cost amortization story: non-SMEs span a wider geographic radius and can profitably bid in distant markets only when contract value is large enough to absorb logistics costs.

Event study distance

Event study (figure A.1 / fig_02_distance_es): semester-by-semester group-65 vs control gap in buyer-winner distance (km). Pre-period gap is large and stable; post-period gap collapses as non-SMEs are removed from the eligible pool.

Caveat. Distance is a coarse proxy for the geographic-catchment channel — a richer specification would use the firm's full operational footprint (e.g., RAIS-validated establishment locations) rather than a single CEP. The RAIS-validated SME indicator partially substitutes for the BEC SME flag in AN-009 but does not enter the distance specification. The null result on low-value items is consistent with the prediction but is not diagnostic of an alternative reading; richer firm-size cross-cuts would resolve it.

Sources.

  • Own analysis: AN-003 (DiDiR distance table, value heterogeneity), AN-004 (distance placebo null → rules out freight/logistics shock).
  • Reports: none direct.
  • News anchors: none direct.
  • Cross-refs: H:distance-widens-under-open; docs/results.md and the heterogeneity-by-value table.
  • Validation: scripts/02_analysis.R → output/tables/tab_distance.tex; scripts/06_extensions.R → tab_heterog_value.tex.