Review of Industrial Organization

, Volume 51, Issue 1, pp 25–42

How Much Vertical Integration? Contractual Choice and Public–Private Partnerships in the United States

Article

Abstract

Efficiency gains in public–private partnerships (PPP) derive from risk transfer and the bundling of different tasks. We study the factors that explain bundling in single contracts. We focus on the choice between integrating operational tasks alone or construction tasks alone, versus vertically integrating both operational and construction tasks. We analyze a new data set that includes 553 PPPs that were concluded in the United States. We find evidence that some financial variables play a role in bundling decisions. In addition, market size and the type of economic sectors involved, are also important drivers of contract choice and bundling decisions.

Keywords

Privatization Public–private partnerships Contracting Vertical integration 

JEL Classification

L14 L33 L51 L88 

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Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  • Daniel Albalate
    • 1
  • Germà Bel
    • 2
  • R. Richard Geddes
    • 3
  1. 1.Department of Applied EconomicsUniversity of BarcelonaBarcelonaSpain
  2. 2.Department of Applied EconomicsUniversity of BarcelonaBarcelonaSpain
  3. 3.Department of Policy Analysis and Management College of Human EcologyCornell UniversityIthacaUSA

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