TRANSACTION COSTS, REGULATION, AND SUBCONTRACTING AT NUCLEAR-POWER-PLANTS

Monitoring problems, firm-specific assets, and regulation influence th e relative costs in a firm's make-or-buy decision. At nuclear power pl ants, legal limits on radiation exposure are thought to be a significa nt factor in determining which tasks to subcontract. In an examination of 30 tasks at nuclear power plants from 1978 to 1986, contract emplo yees are more often hired for tasks with higher radiation exposure, wh ere monitoring is difficult, and where firm-specific assets are import ant. (C) 1998 Elsevier Science B.V. All rights reserved.