Green Is Less Greedy: Competition, Corruption, and Productivity in Green Public Procurement in Bulgaria

ABSTRACT Green Public Procurement (GPP) is promoted for environmental sustainability, but its economic effects are less studied. This paper examines GPP's impact on firm productivity, competition, and corruption risks in Bulgaria, a challenging context for governance. Using data from public procurement contracts (2011–2019) and firm‐level panel data, we analyze the relationship between GPP participation and productivity. Results of panel fixed effects models show that firms winning GPP contracts have 14% higher labor productivity and up to 6% higher total factor productivity, particularly under competitive, low‐corruption risk procedures. GPP also enhances market competition by increasing firm entry, reducing supplier dominance, and lowering local winner shares. Additionally, it reduces corruption risks, as reflected by a drop in the Corruption Risk Index and a 1.5 percentage point decrease in single bidding rates. These findings highlight GPP's dual role in advancing environmental goals and improving economic efficiency and procurement integrity.