Civic Capital and Service Outsourcing: Evidence from Italy

Quaderni - Working Paper DSE N° 1125

43 Pages Posted: 28 Nov 2018

See all articles by Matthias Burker

Matthias Burker

University of Bologna - Department of Economics

Irene Mammi

Ca' Foscari University of Venice

G. Alfredo Minerva

University of Bologna - Department of Economics

Date Written: November 3, 2018

Abstract

This paper studies whether civic capital (those persistent shared beliefs and values that help a group overcome the free rider problem in the pursuit of socially valuable activities) acts an effective restraint against opportunistic behavior in transactions by looking at the firm-level degree of service outsourcing in Italy. Our results show that firms tend to outsource more services in areas where civic capital is higher. We claim that the rise in the propensity to engage in transactions with outside service suppliers stems from the decrease in opportunism between the parties involved. We consider a dynamic specification which allows to disentangle state dependence of service out- sourcing from firm-level heterogeneity, and we use historical instruments to address the potential endogeneity of civic capital.

Keywords: Civic Capital, Purchased Service Intensity, Vertical Integration, Out-sourcing

JEL Classification: A13, L20, L24, R12

Suggested Citation

Burker, Matthias and Mammi, Irene and Minerva, Gaetano Alfredo, Civic Capital and Service Outsourcing: Evidence from Italy (November 3, 2018). Quaderni - Working Paper DSE N° 1125. Available at SSRN: https://ssrn.com/abstract=3278641 or http://dx.doi.org/10.2139/ssrn.3278641

Matthias Burker (Contact Author)

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

Irene Mammi

Ca' Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

Gaetano Alfredo Minerva

University of Bologna - Department of Economics ( email )

Strada Maggiore 45
Bologna, 40125
Italy

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