Production arrangements by US building and non-building contractors: an update

The paper presents the results of the first phase of a long-term study that addresses the determinants of the production arrangements by US building (commercial and residential construction) and non-building contractors (transportation, environmental and industrial construction). Empirical and census data are used to understand the subcontracting and self-performance practice of the considered contractors. The significant differences in their production arrangements are explained in terms of range of technological requirements and their relative importance within undertaken projects. Building contractors tend to subcontract much of their production, because of the relatively wider range of technological inputs of building projects and liability concerns. On the contrary, non-building contractors self-perform much of their production, because of the relatively narrower range of technological inputs of their projects and higher fixed investments in dedicated assets.