TY - BOOK

T1 - Essays on private firms' information environment

AU - Pizzo, Carmine

PY - 2025

Y1 - 2025

N2 - This thesis investigates how interactions with government agencies shape private firms’ information environment. Chapter 2 examines how government certifications on firms’ regulatory compliance affect firms’ access to public procurement and the efficiency of procurement contract allocation. I explore the introduction of the Legality Rating in Italy, a government certification rating firms based on their efforts to prevent misconduct and criminal infiltration. I find that the certification improves firms’ access to public procurement. Furthermore, I show that certified firms execute their contracts more efficiently with fewer cost overruns, modifications, and delays. Overall, the results show that government certifications can improve the allocation of public resources. Chapter 3 investigates how information spillovers among product market peers mitigate private firms’ information frictions regarding government programs. Using a novel definition of product market peers based on firms’ common bids for public procurement contracts, we find that firms are more likely to obtain the Legality Rating after competing in a public procurement contract with a certified peer. Cross-sectional tests reveal that firms obtain the certification primarily to reduce certified peers’ competitive advantage. This study identifies a novel channel through which firms acquire information—public procurement networks. Chapter 4 examines the effect of participating and losing a bid for a public procurement contract on firms’ tax avoidance. We predict that disclosing the outcome of a public procurement contract allows firms to learn about their competitiveness relative to peers. Consistent with this prediction, we find that firms engage in more tax avoidance to improve their competitive position after losing a bid for a public procurement contract. Furthermore, we show that increased tax avoidance raises firms’ likelihood of winning a subsequent public procurement contract. This paper provides novel evidence on how disclosing public procurement outcomes facilitates learning about participating firms’ competitiveness.

AB - This thesis investigates how interactions with government agencies shape private firms’ information environment. Chapter 2 examines how government certifications on firms’ regulatory compliance affect firms’ access to public procurement and the efficiency of procurement contract allocation. I explore the introduction of the Legality Rating in Italy, a government certification rating firms based on their efforts to prevent misconduct and criminal infiltration. I find that the certification improves firms’ access to public procurement. Furthermore, I show that certified firms execute their contracts more efficiently with fewer cost overruns, modifications, and delays. Overall, the results show that government certifications can improve the allocation of public resources. Chapter 3 investigates how information spillovers among product market peers mitigate private firms’ information frictions regarding government programs. Using a novel definition of product market peers based on firms’ common bids for public procurement contracts, we find that firms are more likely to obtain the Legality Rating after competing in a public procurement contract with a certified peer. Cross-sectional tests reveal that firms obtain the certification primarily to reduce certified peers’ competitive advantage. This study identifies a novel channel through which firms acquire information—public procurement networks. Chapter 4 examines the effect of participating and losing a bid for a public procurement contract on firms’ tax avoidance. We predict that disclosing the outcome of a public procurement contract allows firms to learn about their competitiveness relative to peers. Consistent with this prediction, we find that firms engage in more tax avoidance to improve their competitive position after losing a bid for a public procurement contract. Furthermore, we show that increased tax avoidance raises firms’ likelihood of winning a subsequent public procurement contract. This paper provides novel evidence on how disclosing public procurement outcomes facilitates learning about participating firms’ competitiveness.

U2 - 10.17635/lancaster/thesis/2813

DO - 10.17635/lancaster/thesis/2813

M3 - Doctoral Thesis

PB - Lancaster University

ER -