Private Transaction Costs in Public Sector Contracting

Ole Helby Petersen, Jesper Rosenberg Hansen, Anders Ryom Villadsen, Kurt Houlberg

Publikation: KonferencebidragPaperForskning

Resumé

Private companies contract with governments to deliver a broad range of goods and services such as construction, infrastructure, health care, facility management and much more. Such relationships implicate transaction costs, broadly understood as “all the cost which do not exist in a Robinson Crusoe economy.” (Cheung, 1998; 515). However, whereas most previous literature has focused on the transaction cost considerations of governments in the public/private contracting relationship, much less scholarly attention has been devoted to the transaction costs of private companies in the relation. This paper aims to address part of this knowledge gap by examining the pre-contractual transaction costs of private companies vending services and products in contracts with governments. First, we draw on transaction cost theory and broader economics and industrial organization literature to develop a framework that combines theoretical and firm-, contract-, and government-level transaction cost factors. Second, we utilize data from a unique survey of Danish companies to examine the magnitude and determining factors of companies’ transaction costs across eight industries that regularly contract with the public sector. Our findings underline the need for taking private companies’ transaction costs more seriously in the planning and execution of public sector contracting to maximize the likelihood of win-win outcomes for government and business.

OriginalsprogEngelsk
Publikationsdato2018
StatusUdgivet - 2018
BegivenhedXXII Annual IRSPM Conference - University of Edinburgh, Edinburgh, Storbritannien
Varighed: 11 apr. 201813 apr. 2018

Konference

KonferenceXXII Annual IRSPM Conference
LokationUniversity of Edinburgh
LandStorbritannien
ByEdinburgh
Periode11/04/201813/04/2018

Citer dette

Petersen, O. H., Hansen, J. R., Villadsen, A. R., & Houlberg, K. (2018). Private Transaction Costs in Public Sector Contracting. Afhandling præsenteret på XXII Annual IRSPM Conference, Edinburgh, Storbritannien.
Petersen, Ole Helby ; Hansen, Jesper Rosenberg ; Villadsen, Anders Ryom ; Houlberg, Kurt. / Private Transaction Costs in Public Sector Contracting. Afhandling præsenteret på XXII Annual IRSPM Conference, Edinburgh, Storbritannien.
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Petersen, OH, Hansen, JR, Villadsen, AR & Houlberg, K 2018, 'Private Transaction Costs in Public Sector Contracting' Paper fremlagt ved XXII Annual IRSPM Conference, Edinburgh, Storbritannien, 11/04/2018 - 13/04/2018, .

Private Transaction Costs in Public Sector Contracting. / Petersen, Ole Helby; Hansen, Jesper Rosenberg; Villadsen, Anders Ryom; Houlberg, Kurt.

2018. Afhandling præsenteret på XXII Annual IRSPM Conference, Edinburgh, Storbritannien.

Publikation: KonferencebidragPaperForskning

TY - CONF

T1 - Private Transaction Costs in Public Sector Contracting

AU - Petersen, Ole Helby

AU - Hansen, Jesper Rosenberg

AU - Villadsen, Anders Ryom

AU - Houlberg, Kurt

PY - 2018

Y1 - 2018

N2 - Private companies contract with governments to deliver a broad range of goods and services such as construction, infrastructure, health care, facility management and much more. Such relationships implicate transaction costs, broadly understood as “all the cost which do not exist in a Robinson Crusoe economy.” (Cheung, 1998; 515). However, whereas most previous literature has focused on the transaction cost considerations of governments in the public/private contracting relationship, much less scholarly attention has been devoted to the transaction costs of private companies in the relation. This paper aims to address part of this knowledge gap by examining the pre-contractual transaction costs of private companies vending services and products in contracts with governments. First, we draw on transaction cost theory and broader economics and industrial organization literature to develop a framework that combines theoretical and firm-, contract-, and government-level transaction cost factors. Second, we utilize data from a unique survey of Danish companies to examine the magnitude and determining factors of companies’ transaction costs across eight industries that regularly contract with the public sector. Our findings underline the need for taking private companies’ transaction costs more seriously in the planning and execution of public sector contracting to maximize the likelihood of win-win outcomes for government and business.

AB - Private companies contract with governments to deliver a broad range of goods and services such as construction, infrastructure, health care, facility management and much more. Such relationships implicate transaction costs, broadly understood as “all the cost which do not exist in a Robinson Crusoe economy.” (Cheung, 1998; 515). However, whereas most previous literature has focused on the transaction cost considerations of governments in the public/private contracting relationship, much less scholarly attention has been devoted to the transaction costs of private companies in the relation. This paper aims to address part of this knowledge gap by examining the pre-contractual transaction costs of private companies vending services and products in contracts with governments. First, we draw on transaction cost theory and broader economics and industrial organization literature to develop a framework that combines theoretical and firm-, contract-, and government-level transaction cost factors. Second, we utilize data from a unique survey of Danish companies to examine the magnitude and determining factors of companies’ transaction costs across eight industries that regularly contract with the public sector. Our findings underline the need for taking private companies’ transaction costs more seriously in the planning and execution of public sector contracting to maximize the likelihood of win-win outcomes for government and business.

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M3 - Paper

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Petersen OH, Hansen JR, Villadsen AR, Houlberg K. Private Transaction Costs in Public Sector Contracting. 2018. Afhandling præsenteret på XXII Annual IRSPM Conference, Edinburgh, Storbritannien.