We estimate the impact of being awarded a public contract on the probability of firm survival. To this end, we compare the winning firms and those ranked immediately below them in public works auctions, using various sources of data on contracts (ANAC and Telemat), on firms (Cerved and Infocamere), and on credit (Central Credit Register).
The results show that the awarding of a public contract has no significant impacts on either revenues or the number of employees, but it replaces private demand. However, there is a significant impact on the survival of firms, which extends beyond the duration of the contract: three years after the contract is awarded, the probability of exiting the market is 0.6 per cent, compared with an average value of 4 per cent. The effect is mainly driven by an expansion of access to credit without the need for additional guarantees.
