Firms’ Access to Public Procurement Contacts in Russia. The Case of Processing Industries of Sanctioned Food Products

The main aim of this paper is to demonstrate whether the embargo on foodstuffs imposed by Russia restricted the competition among food processing enterprises for accessing the domestic public procurement market and. If yes, in what way the market's structure changed. I gathered information on over 25000 companies from every Russian region in the period 2011-2015. Firms were divided into two groups, according to whether their principal input source for their processing activity was banned or not. The empirical analysis, extended also at a sub-sectorial level, evidenced that the embargo restricted the competition in the "sanctioned" group. Specifically, foreign- as well as state-owned enterprises reduced their chances to access government procurement. At the same time, large companies increased their probabilities to supply the government relatively to smaller size ones. The analysis also evidences that the market structure undergone other changes caused by both the introduction of a new legislative framework regulating public procurement from 2014, as well as the effects of the economic crisis that hit Russia in the same year.