Presenter: Lei He
Paper: “Network Effects, Competition and Survival of Small and Minority-Owned Firms in Public Procurement ,” joint work with Georgia Kosmopoulou, Xueqi Zhou, and Nancy Alexander.
Abstract:
We study how networks of firms competing for government contracts are shaping access to subcontracting opportunities, particularly for Disadvantaged Business Enterprises (DBEs). Using Bayesian estimation methods, we analyze the dynamic effects of strategic link formation on bidding outcomes and market exit, controlling for firm, auction, market characteristics and DBE participation goals. While the network structure of non-DBE firms plays a significant role in their subcontracting choices, the connections to DBE subcontractors do not hold as much weight in decisions regarding outsourcing activities. This emphasizes the importance of DBE dedicated programs in ensuring equal opportunities for disadvantaged businesses.