Public procurement and business performance in COVID-19 situation: Decline in firms' entry

This study compares the public procurement and bidding behavior of businesses under the declaration of a state of emergency owing to the spread of COVID-19 with the procurement trends in previous years for each local development bureau. The results showed that the trends of both procurers and participants by year did not change significantly compared to those in the past. However, a major problem was found in that the number of participants was decreasing in the districts under the declaration. On the one hand, looking at the trends by district and time period as an effect of this, the trends of participants and the impact on bidding prices after participation were generally considered to have been calm, partly because the policy of flexible response to the situation on the ordering side was clarified. On the other hand, it should be noted that this phenomenon of entry may lead to a decrease in productivity through less stimulus for innovation. The economic situation is still in a state of hibernation even in mid-2021. In particular, large-size construction businesses have the flexibility to respond to this situation. Consequently, this cohort study can provide an opportunity for causal inferences.