Suchergebnisse

AbstractGovernment procurement contracts are frequently subject to policies that specify a subcontracting requirement for the utilization of historically disadvantaged firms. I study how such subcontracting policies affect procurement auctions using data from New Mexico's Disadvantaged Business Enterprise Program. Theoretically, subcontracting requirements reduce prime contractors' private information on their costs by requiring them to select their subcontractors from a common pool of disadvantaged firms. This feature mitigates cost increases from using more costly subcontractors by causing prime contractors to strategically lower their markups. My estimated model reveals that New Mexico's past subcontracting requirements led to minor increases in procurement costs.

This article examines the impact of incomplete contracts on subcontracting and the design of procurement auctions. I estimate the effect of ex post contract revisions on unit costs for both subcontracted and in‐house performed work items on bridge projects procured by the California Department of Transportation. I model a scoring auction showing how ex post revisions skew bidding decisions and estimate unit costs from bid data using the method of sieve estimation. The results highlight the cost implications of incomplete contracting frictions, subcontracting decisions, and bidding distortions. In conclusion, I propose alternative auction mechanisms that could improve outcomes.

This paper examines changes in the organization of the Spanish cotton industry from 1736 to 1860 in its core region of Catalonia. As the Spanish cotton industry adopted the most modern technology available and experienced the transition to the factory system, cotton spinning and weaving mills became increasingly vertically integrated. Asset specificity, more than other factors, explains this tendency towards vertical integration. The probability of a firm being vertically integrated was higher among firms located in districts with high concentration ratios, and rose with size and the use of modern machinery. At the same time, subcontracting predominated in other phases of production and distribution, where transaction costs appear to be less important.

Abstract Although outsourcing (or subcontracting) has been subject of great controversy, there is predominant consensus over the concept that defines it. The aim of this paper is to discuss this consensus and point out its contradictions, indicating that the casualization of labour related to outsourcing is not a contingency, but corollary of the nature of this way of hiring workers, which tends to reduce the chances of limiting labour exploitation.