Winner of the ResearchEdge Competition

Riccardo will be presenting his work: "The impact of corruption on procurement performance. An assessment of Italian public work contracts and suppliers"

This study develops an original corruption risk indicator at the Italian procurement level – analysing Italian public infrastructures from 2007 to 2013 – and estimates the correlation between the profile of contract suppliers and the corruption risk indicator in question. The methodology builds on a three stage semi-parametric procedure and relies on a residual approach in which the unexplained part of an inefficiency equation provides the estimates of the potential risk of corruption. The results from an updated Italian public procurement dataset suggest that the risk of corruption prevails in larger urban, especially in Lazio, Tuscany and Lombardy. Then, a risk-based assessment exercise is performed to profile suppliers. The risk indicator is regressed on suppliers’ financial and ownership data to identify patterns among firms winning risky contracts. Suppliers associated with high levels of corruption risk in public contracting are more profit-seeking, hold low levels of debts and need on average more days to pay their customers. Finally, suppliers involved in public work contracts at high risk of corruption are more likely to have legal and/or financial connections with opaque jurisdictions.