Dakshina G. De Silva

An Empirical Analysis of Entrant and Incumbent Bidding in Road Construction Auctions

This paper explores differences in the bidding patterns of entrants and incumbents in road construction auctions. We find that entrants bid more aggressively and win auctions with significantly lower bids than incumbents. The differences in their bidding patterns are consistent with a model of auctions in which the distribution of an entrants costs exhibits greater dispersion than that of an incumbents and relations of stochastic dominance in the distributions do not persist for the entire range of estimated costs. We also find that more efficient firms bid, on average, more aggressively and firms with greater backlogs bid less aggressively.

Sequential Bidding in Auctions of Construction Contracts

We analyze bidding patterns in morning and afternoon auctions of construction contracts. We find no statistically significant difference in the probability to bid in the afternoon between those who won and those who lost in morning sessions. As a result, the information released in the morning increases the observable asymmetries and affects bidding behavior. Firms that win in the morning bid more aggressively, in the absolute sense, in the afternoon. However, those who lost in morning sessions bid more aggressively, relative to their morning bids, than those who won in the morning.

Going green: does it depend on education, gender or income?

Sustainable development entails meeting our present needs without compromising the ability of future generations to meet their needs. This requires us to treat economic, social and environmental aspects in an integrated way, but little is known about the nature of individual preferences towards the trade-offs involved in this effort. For the first time, we study individual preferences towards the environment, social wellbeing, and financial wellbeing using a survey of over 1400 households in the Netherlands. Using nonparametric, parametric, and matching methods, we find that gender and education are important factors for sustainability rather than income levels. Moreover results indicate that educated females put the greatest value on going green whilst being socially minded.

Sri Lanka's Experiment with Devaluation: VAR and ECM Analysis of the Exchange Rate Effects on Trade Balance and GDP

The objective of this study is to empirically analyze the impact of the devaluation of the Sri Lankan currency (rupee) on Sri Lankan trade balance and gross domestic product. The World Bank and the International Monetary Fund (IMF) have been promoting devaluation as a policy tool for economic growth and stability in LDCs. However, there is substantial research supporting the “J-Curve” effect and contractionary effects on economies due to devaluation, especially for less developed countries (LDCs). The results show a contractionary impact on the Sri Lankan output.

Research Universities and Regional High‐Tech Firm Start‐Up and Exit

If localized knowledge spillovers are present in the university setting, higher rates of both start-up and/or survival would be observed in areas that are geographically proximate to the university. Using a detailed industry data set for Texas for 1999:3–2005:2, we analyze start-up and exit rates for high-tech firms. Based on a Poisson quasi-maximum likelihood estimation, we find evidence that the level of R&D and proximity of a research institution positively affects the likelihood of technology start-ups. However, using both the Cox proportional hazards model and Kaplan–Meier approach, our results suggest that geographic proximity to knowledge centers does not reduce hazard rates. (JEL R12, R53, O18)

Geographic Concentration and Firm Survival

If localization economies are present, firms within denser industry concentrations should exhibit higher levels of performance than more isolated firms. Nevertheless, research in industrial organization that has focused on the influences on firm survival has largely ignored the potential effects from agglomeration. Recent studies in urban and regional economics suggests that agglomeration effects may be very localized. Analyses of industry concentration at the MSA or county-level may fail to detect important elements of intra-industry firm interaction that occur at the sub-MSA level. Using a highly detailed dataset on firm locations and characteristics for Texas, this paper analyses agglomeration effects on firm survival over geographic areas as small as a single mile radius. We find that greater firm density within very close proximity (within 1 mile) of firms in the same industry increases mortality rates while greater concentration over larger distances reduces mortality rates.

What Blows in with the Wind

The shift toward renewable forms of energy for electricity generation in the electricity generation industry has clear implications for the spatial distribution of generating plant. Traditional forms of generation are typically located close to the load or population centers, while wind- and solar-powered generation must be located where the energy source is found. In the case of wind, this has meant significant new investment in wind plant in primarily rural areas that have been in secular economic decline. This article investigates the localized economic impacts of the rapid increase in wind power capacity at the county level in Texas. Unlike input-output impact analysis that relies primarily on levels of inputs to estimate gross impacts, we use traditional econometric methods to estimate net localized impacts in terms of employment, personal income, property tax base, and key public school expenditure levels. While we find evidence that both direct and indirect employment impacts are modest, significant increases in per capita income accompany wind power development. County and school property tax rolls also realize important benefits from the local siting of utility scale wind power, although peculiarities in Texas school funding shift localized property tax benefits to the state.

Entry, growth and survival in the green industry

ABSTRACT Entry, growth and survival in the green industry. Regional Studies. Economists are interested in the factors that induce firm entry, lead to growth and help firms succeed in various markets. Such information can be helpful to policy-makers, but, unfortunately, such patterns have not been considered for ‘green industries’. This paper takes advantage of a recent definition of green industries proposed by the US Bureau of Labor Statistics (BLS) to investigate patterns characterizing these industries within the State of Texas.

Efficacy of a Bidder Training Program: Lessons from LINC

In an effort to accommodate a change in the Federal Highway Administrations goals towards race-neutral methods concerning the involvement of Disadvantaged Business Enterprises in contracting, the Texas Department of Transportation created a 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. Unlike other policies that target these firms, we find the program generated substantial savings for the state which come at a very low cost.

Entry and Exit Patterns of "Toxic" Firms

We pair an establishment-level dataset from Texas with public information available in the Toxics Release Inventory (TRI) to evaluate the standing of dirty industries in Texas census tracts with a focus on environmental justice concerns. The share of nonwhite residents in a tract is positively correlated with the number of TRI-reporting firms, and an inverse-U-shaped relationship characterizes the number of TRI-reporting firms and a tracts median income. Even after controlling for factor prices and other covariates that might drive firm location decisions, entrants that report to the TRI are more likely to locate in areas with a higher share of nonwhite residents. Firms that report to the TRI are also more likely to enter areas with a low share of college graduates. In contrast, the number of entrants from industries that do not have TRI reporters is negatively related to the percentage of nonwhite residents in a tract. Firms in these non-reporting industries are also more likely to enter areas with a high share of college graduates. Polluters appear to agglomerate, raising concerns about both chemical releases being concentrated in certain tracts, and also affecting nonwhite-dense areas disproportionately. The strength of these effects often depend on an urban/rural classification, with rural areas experiencing the most pronounced concerns. Moreover, TRI-reporting firms are less likely to exit the market relative to their peers that operate in the same industry but do not need to file TRI reports, suggesting that releases may affect a region in the long run.