Procurement Literacy Capability Theory (PLCT): Development and Validation

Abstract

Background: Ethical challenges in public procurement are often addressed through compliance approaches that stress rule awareness. These perspectives, however, offer limited insight into how ethical intentions form before professional practice. This study develops and empirically validates the Procurement Literacy Capability Theory (PLCT), which conceptualises procurement literacy as a sequenced, interdependent set of capabilities that produce ethical readiness. Methods: Survey data were collected from 776 undergraduates in procurement-related programmes at four accredited Ghanaian universities. Structural equation modelling tested capability interdependence, sequencing, and behavioural translation. Mediation was examined via bootstrapped indirect effects, with sensitivity analysis using reduced structural models. Results: The findings support PLCT. Digital and E-Procurement Literacy predicts planning and decision-making capability, which then predicts supplier and contract management literacy. This literacy strongly influences Ethical Procurement Practice Literacy, the strongest predictor of Ethical Behavioural Intention. Legal and policy knowledge literacy has no direct effect on ethical intention but acts indirectly through ethical procurement practice capability. Models excluding ethical practice capability have much lower explanatory power. Conclusions: Ethical Behavioural Intention in procurement is shaped by sequenced capability development and applied ethical competence rather than rule awareness alone, confirming ethical practice literacy as the central behavioural mechanism within PLCT.