Transaction Cost Analysis of the Outsourcing of National Center for Traditional Arts
Date Issued
2008
Date
2008
Author(s)
Chen, Yi-chun
Abstract
Inspired by facts from the private participation in public facility and services delivery, this study applies transaction cost approach to explain many stylized facts of outsourcing. In this study, the conditions under which transaction cost issues resulting in project delivery are derived. Further, the circumstances under which outsourcing will not provide additional benefit, and what sorts of outsourcing mode choice are likely to provide the greatest benefit are detailed. Case study, the outsourcing of Nation Center for Traditional Arts uses operate-and-transfer (OT) for its governance mode choice. This study discusses the transaction cost involved in outsourcing process which includes three main issues：how asset specificity affects the mode choice of outsourcing, where are the transaction cost derived from, and how the government interacts with the franchiser. The franchiser in the case study incurs a cost of providing a comprehensive design of traditional arts operation, and is faced with a trade-off between providing incentives and reducing ex post transaction costs due to costly renegotiation with the government. Conclusions are drawn and extensions are proposed, related to economics and politics of transaction cost.
Subjects
transaction cost
contracting out
public-private partnerships
operate-and-transfer (OT) mode
outsourcing
SDGs
Type
thesis
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ntu-97-R94322014-1.pdf
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