Paper #428

Títol:

Causes of subcontracting: Evidence from panel data on construction firms

Autors:

Manuel González, Benito Arruñada i Alberto Fernández

Data:

Novembre 1999

Resum:

This paper examines factors explaining subcontracting decisions in the construction industry. Rather than the more common cross-sectional analyses, we use panel data to evaluate the influence of all relevant variables. We design and use a new index of the closeness to small numbers situations to estimate the extent of hold-up problems. Results show that as specificity grows, firms tend to subcontract less. The opposite happens when output heterogeneity and the use of intangible assets and capabilities increase. Neither temporary shortage of capacity nor geographical dispersion of activities seem to affect the extent of subcontracting. Finally, proxies for uncertainty do not show any clear effect.

Paraules clau:

Intangible assets, monitoring costs, specificity, subcontracting, vertical integration, uncertainty

Codis JEL:

L22, L14, L74

Àrea de Recerca:

Economia de l'Empresa i Organització Industrial

Publicat a:

Journal of Economic Behavior and Organization, 42 (2), 2000, 167-187

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