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Article
Firms’ Qualification and Subcontracting in Public Procurement: an Empirical Investigation
The Journal of Law, Economics and Organization (2015)
  • Luigi Moretti
  • Paola Valbonesi
Abstract

Using a newly assembled dataset, we empirically investigate the effects of subcontracting on procurement auction prices in Italy. In this setting, the pre-qualifications required for firms aiming to bid on public contracts determine the firms' different subcontracting formats. We find that fully qualified firms in a position to choose whether to subcontract generally offer lower prices than partially qualified firms, which must proceed with mandatory subcontracts. This result indicates that the firms' voluntary arrangements tend to improve market performance, while imposed arrangements tend to worsen market performance, in the public procurement supply-chain.

Keywords
  • subcontracting in procurement,
  • firm's production strategy,
  • horizontal subcontract,
  • vertical subcontract,
  • public procurement
Disciplines
Publication Date
Winter January 30, 2015
Publisher Statement
The Journal of Law, Economics and Organization, 2015/31, forthcoming.
Citation Information
Luigi Moretti and Paola Valbonesi. "Firms’ Qualification and Subcontracting in Public Procurement: an Empirical Investigation" The Journal of Law, Economics and Organization Vol. forthcoming (2015)
Available at: http://works.bepress.com/paola_valbonesi/24/