Effectiveness of Green Public Procurement in Stimulating Green Products and Resource Efficiency in SMEs: Empirical Analysis of the EU Industries

ABSTRACT This study evaluates the effectiveness of green public procurement (GPP) in stimulating green products and resource efficiency in SMEs. The research uses sample data from 28 European countries (27 EU country members and the United Kingdom) to test two hypotheses, namely, one on the effects of GPP on green products and processes as well as another on the tangibility of the SME sector in stimulating green outcomes. Our original contribution centers upon the vital role of SMEs engaged in the green agenda and how effective GPP is in stimulating green products and resource efficiency. By contributing to the green policy agenda, our research informs policymakers on how effective GPP is in stimulating green outcomes in the SME sector. However, the reality of GPP is that these tend to be relatively high‐risk projects over comparatively long periods of time that are prone to the problem of double externalities. Our research findings show that GPP has positive effects on the likelihood of green products and processes. However, there are mixed results about whether greater tangibility of the SME sector leads to a greater effectiveness of GPP in stimulating green products and processes.