Language as a trade barrier in public procurement: Evidence from Georgia's policies on English language documentation

Abstract

Foreign firm access to the public procurement markets—valued at some $13 trillion worldwide—is not governed by standard trade policies and multilateral trade accords. In trade policy circles, failure to publish procurement tenders in a global language is said to impede foreign market access. Exploiting the nature of Georgia’s public procurement regime, and changes in that regime during 2011–2015 that differed both across tender categories and over time, we use tender-level data to estimate the causal impact of a requirement to publish tenders in the English language on the likelihood a foreign firm wins a state contract, the total value of the winning bid, and the amount of cross-border trade induced. We find that provision of documentation in English doubled awards to foreign firms, and likely more so for small contracts. Finally, we convert our microdata-based estimates into the equivalent values that would have been obtained in gravity-style regressions.