IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v64y2011i3p338-343.html
   My bibliography  Save this article

Contracting contractors

Author

Listed:
  • Singer, Marcos
  • Donoso, Patricio

Abstract

Many companies relay on contractors to execute different tasks of the value chain. This paper develops an agency model subject to moral hazard to study the general structure of the contract offered by a firm (the principal) to several contractors (agents) that perform the same task. A Generalized Least Squares regression tests the model with a panel data of 58 carriers that work for a shipper in Santiago, over 93 weeks. The regression verifies that the principal rewards some performance dimensions, but neglects others. The regression also confirms that contracting prices are sensitive to the alternatives available for the company and the contractors.

Suggested Citation

  • Singer, Marcos & Donoso, Patricio, 2011. "Contracting contractors," Journal of Business Research, Elsevier, vol. 64(3), pages 338-343, March.
    • Handle: RePEc:eee:jbrese:v:64:y:2011:i:3:p:338-343
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148-2963(09)00310-5
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gneezy, Uri & Rustichini, Aldo, 2000. "A Fine is a Price," The Journal of Legal Studies, University of Chicago Press, vol. 29(1), pages 1-17, January.
    2. Kakabadse, Andrew & Kakabadse, Nada, 2002. "Trends in Outsourcing:: Contrasting USA and Europe," European Management Journal, Elsevier, vol. 20(2), pages 189-198, April.
    3. Jack A. Nickerson & Brian S. Silverman, 2003. "Why aren't all Truck Drivers Owner‐Operators? Asset Ownership and the Employment Relation in Interstate for‐hire Trucking," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(1), pages 91-118, March.
    4. George P. Baker & Thomas N. Hubbard, 2004. "Contractibility and Asset Ownership: On-Board Computers and Governance in U. S. Trucking," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(4), pages 1443-1479.
    5. George B. Kleindorfer & Liam O'Neill & Ram Ganeshan, 1998. "Validation in Simulation: Various Positions in the Philosophy of Science," Management Science, INFORMS, vol. 44(8), pages 1087-1099, August.
    6. Margit Osterloh & Bruno S. Frey, 2000. "Motivation, Knowledge Transfer, and Organizational Forms," Organization Science, INFORMS, vol. 11(5), pages 538-550, October.
    7. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    8. M Singer & P Donoso & S Jara, 2002. "Fleet configuration subject to stochastic demand: an application in the distribution of liquefied petroleum gas," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(9), pages 961-971, September.
    9. repec:bla:jfinan:v:59:y:2004:i:4:p:1619-1650 is not listed on IDEAS
    10. Marcos Singer & Patricio Donoso & Sven Widdel, 2007. "¿Premian Las Tarifas El Desempeño Del Transportista?," Abante, Escuela de Administracion. Pontificia Universidad Católica de Chile., vol. 10(1), pages 21-55.
    11. Francine Lafontaine & Scott E. Masten, 2002. "Contracting in the Absence of Specific Investments and Moral Hazard: Understanding Carrier-Driver Relations in U.S. Trucking," NBER Working Papers 8859, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Brenes, Esteban R. & Metzger, Michael & Requena, Bernardo, 2011. "Strategic management in Latin America: Issues and assessment," Journal of Business Research, Elsevier, vol. 64(3), pages 231-235, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marcos Singer & Patricio Donoso & Sven Widdel, 2007. "¿Premian Las Tarifas El Desempeño Del Transportista?," Abante, Escuela de Administracion. Pontificia Universidad Católica de Chile., vol. 10(1), pages 21-55.
    2. Sharon Novak & Scott Stern, 2009. "Complementarity Among Vertical Integration Decisions: Evidence from Automobile Product Development," Management Science, INFORMS, vol. 55(2), pages 311-332, February.
    3. Josef Windsperger & Maria Jell, 2005. "Structuring residual income and decision rights under internal governance: results from the Hungarian trucking industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(5), pages 295-305.
    4. Francine Lafontaine & Margaret Slade, 2007. "Vertical Integration and Firm Boundaries: The Evidence," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 629-685, September.
    5. Timothy Bresnahan & Jonathan Levin, 2012. "Vertical Integration and Market Structure [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    6. Haili Zhang & Michael Song & Xiaoming Yang & Ping Li, 2019. "What are Important Technologies for Sustainable Development in the Trucking Industries of Emerging Markets? Differences between Organizational and Individual Buyers," Sustainability, MDPI, vol. 12(1), pages 1-23, December.
    7. Baker, George P. & Gibbons, Robert & Murphy, Kevin J., 2008. "Strategic alliances: Bridges between "islands of conscious power"," Journal of the Japanese and International Economies, Elsevier, vol. 22(2), pages 146-163, June.
    8. Paul A. Grout & Wendelin Schnedler, 2008. "Non-Profit Organizations in a Bureaucratic Environment," The Centre for Market and Public Organisation 08/202, The Centre for Market and Public Organisation, University of Bristol, UK.
    9. Robert Gibbons & John Roberts, 2012. "The Handbook of Organizational Economics," Economics Books, Princeton University Press, edition 1, volume 1, number 9889.
    10. Benito Arruñada & Manuel González-Díaz & Alberto Fernández, 2004. "Determinants of organizational form: transaction costs and institutions in the European trucking industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 13(6), pages 867-882, December.
    11. Francine Lafontaine & Laura Malaguzzi Valeri, 2009. "The deregulation of international trucking in the European Union: form and effect," Journal of Regulatory Economics, Springer, vol. 35(1), pages 19-44, February.
    12. Brian S. Silverman & Paul Ingram, 2017. "Asset ownership and incentives in early shareholder capitalism: Liverpool shipping in the eighteenth century We are deeply indebted to historians Nick Radburn and especially Stephen Behrendt for exten," Strategic Management Journal, Wiley Blackwell, vol. 38(4), pages 854-875, April.
    13. Hodaka Morita & Maroš Servátka, 2018. "Investment in Outside Options as Opportunistic Behavior: An Experimental Investigation," Southern Economic Journal, John Wiley & Sons, vol. 85(2), pages 457-484, October.
    14. Josh Lerner & Ulrike Malmendier, 2010. "Contractibility and the Design of Research Agreements," American Economic Review, American Economic Association, vol. 100(1), pages 214-246, March.
    15. Patrick Legros & Andrew F. Newman, 2008. "Competing for Ownership," Journal of the European Economic Association, MIT Press, vol. 6(6), pages 1279-1308, December.
    16. Ilya Segal & Michael D.Whinston, 2012. "Property Rights [The Handbook of Organizational Economics]," Introductory Chapters,, Princeton University Press.
    17. Oliver Baumann & Nils Stieglitz, 2011. "Motivating Organizational Search," DRUID Working Papers 11-08, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    18. Jean-Michel Oudot & Claude Ménard, 2010. "Opportunisme ou équité ? Le cas des contrats d’approvisionnement de défense," Revue Française d'Économie, Programme National Persée, vol. 24(3), pages 195-226.
    19. Oosterbeek, Hessel & Sloof, Randolph & Sonnemans, Joep, 2011. "Rent-seeking versus productive activities in a multi-task experiment," European Economic Review, Elsevier, vol. 55(5), pages 630-643, June.
    20. Gürtler, Oliver, 2006. "Optimal Ownership Structures in the Presence of Investment Signals," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 103, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:64:y:2011:i:3:p:338-343. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.