Tenders Electronic Daily (TED), which is the online version of the supplement to the Official Journal of the EU dedicated to European public procurement. All procurement contracts above a certain threshold awarded by European public institutions must be published in TED.<sup>9</sup> Therefore, although many contracts below the threshold are published in TED, relatively big projects will be over-represented in our data.

Because we want to focus on procurement contracts that are comparable across countries, we focus our analysis on those contracts published by TED only, with the intention to avoid sample selection issues that might arise when combining data from national platforms for different countries. National regulations concerning public procurement not subject to the EU Directives do not need to converge in many essential aspects. Among others: the choice of procedure, its publication, the set of thresholds, the choice of participants, and the awarding criteria. On the contrary, EU Directives assure that the procurement legal framework is the same for all Member States. We provide details about the procurement system in the European Union in Appendix A.

We currently restrict our sample to contracts awarded in France and Spain. Overall, our final dataset contains 1,194,482 lot-level contracts between 2009 and 2019. Each lot observation contains information of a contract between an establishment (supplier or bidder) and a contracting authority (buyer). For each awarded lot we have data on: the procedure used to allocate the contract, the product code of the tender (9-digit products classified according to the Common Procurement Vocabulary, CPV), the year, the estimated price, the final price, the name and location of the government agency buying, and the name and location of the firm to which the establishment selling belongs. Our data has two limitations related to the level of detail at which contract information is reported. First, for some firms we do not know the municipality, so we always use the region of the firm as the firm’s location to keep as many firms in our analysis as possible. Second, for most of the observations, the product code information is not provided at the 9 digit level, but at a more aggregated category (between 2 and 9 digits)<sup>10</sup> . We next explain our procedure to classify buying agencies into national vs. subnational governments. We provide more detailed descriptive statistics of our final data set in Appendix B.

# **3.1 Classifying agencies into government types: national vs. subnational**

At the core of our data work is to classify buying agencies into different government types. Our main goal is to divide all contracting authorities into four geographical levels: national, regional, provincial, and local. Additionally, we want to isolate some government agencies that do not 9Currently, these thresholds are determined by the EU Directives (Directive 2014/24/EU on public procurement, and Directive 2014/25/EU on procurement by entities operating in the water, energy, transport and postal services sectors). The thresholds for publication depend on the type of government and type of contract. For example, the threshold for supplies and services contracts by central government authorities is e139,000. We provide more details about the procurement system in Europe in Appendix A.

> 10In our clean sample, 10.6% of observations only have information at the 2-digit product code level, 62.2% of observations have information of the product code at the 3 to 5 digits level and 27.2% of contracts have information at 6 digits or higher.

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