Paying over the odds at the end of the fiscal year. Evidence from Ukraine
研究乌克兰政府采购数据发现，供应商在财政年度末利用政府预算即将到期而提高价格和利润率，并分析了不同商品类型、买卖关系长度和新冠疫情的影响。
Governments are the largest buyers in most countries. They tend to operate annually expiring budgets and spend disproportionately large amounts at year-end. This paper is the first to investigate whether supplier firms increase prices at year-end to benefit from this behaviour. We develop a novel method using neural networks to estimate firms margins from the bidding behaviour of other firms in procurement auctions. We use a dataset of Ukrainian government procurement between 2017 and 2021 to document significantly higher prices and supplier profit margins at year-end. We demonstrate how results change depending on the type of good, the length of the buyer–supplier relationship, and the impact of Covid-19. Finally, we provide policy suggestions on how funds could be saved.