Dr. Heiner Mikosch - Seminar Presentation

Prof. De Silva

Date and Time: June 23rd, 2017, 10:00 - 11:30 am

Room: A 101 in the Economics Building (Museum)

 

Abstract

In an effort to accomomodate a change in the U.S. Federal Highway Administration´s goals towards "race-neutral methods" concerning the involvement of Disadvantaged Business Enterprises in procurement contracting, the Texas Department of Transportation created a Learning, Information, Networking and Collaboration (LINC) bidder training program.

Using ten years of data, we examine the effects this program had on bidder behavior, project costs for the government, and the ability of these firms to compete in the procurement contracting industry. We distinguish between ineligible firms as well as eligible firms that undergo training and those that don´t, to consider empirical models which allow for potential asymmetries across these bidder groups. Unlike other programs that target these firms, we find that LINC generated substantial savings for the state through direct competition effects stemming from aggressive bidding of LINC graduates but also via indirect competition effects - by inducing other firms to bid more aggressively. These changes generate benefits to the state which come at a very low cost.

 

About the Speaker

Prof. De Silvay is Professor at the Lancaster University Management School. His research focus are Industrial Organization, Regional and Urban Economics, and Environmental and Natural Resource Economics.