Business networks and public procurement in Turkey

Abstract

In this chapter, we quantitatively analyze the role of network membership in the performance of firms within the public procurement market in Turkey. We use a unique public procurement dataset of all high-value public procurement contracts-those with a contract value worth over TL 1,000,000-awarded between 2005 and 2010. We consider two types of networks: (1) Internet-based procurement-specific networks and (2) business networks established through business associations. Internet-based procurement-specific business networks provide their members with a wide range of procurement related services, access to critical resources, and timely information. Business associations help member firms establish a strong and unified presence, effectively protect their shared interests, and thus collectively influence governmental economic policies. The findings suggest that both types of network memberships are effective in winning public procurement contracts. There is also an overlap among network memberships, with 8.4% of contracts awarded to the firms that have membership in both networks. © 2015, IGI Global.