Impact of Government Outsourcing Contracts on High-Tech Vendors: An Empirical Study
Bibliographic record
Abstract
Outsourcing is an important strategic decision of high-tech firms. However, while the research has extensively studied the implications of outsourcing to high-tech clients, its impact on high-tech vendors remains underexplored. This study empirically estimates the impact of government outsourcing contracts on high-tech vendors. Employing the earnings-return analyses framework, we find that, for high-tech vendors engaged in government outsourcing contracts, the stock market places a higher value on each unit of unexpected earnings compared to other firms. Additionally, this impact becomes stronger for contracts with longer terms, for contracts outsourced by the U.S. government or by countries with better political and economical stability. We obtain causal evidence through difference-in-differences (DID) analyses of high-tech firms’ initiations of government contracts. Mechanism analyses uncover two primary drivers behind this impact: increased persistence of future earnings and improved alignment between accrual earnings and cash flows. Overall, our research indicates that when valuing high-tech firms, the stock market incorporates information from supply-chain networks, especially that related to government customers. Our results underscore the importance of obtaining government outsourcing contracts for high-tech firms’ managers. Becoming a vendor to the government helps a high-tech firm reduce the uncertainty faced by its outside investors, who in turn value the high-tech firm’s earnings to a greater extent.
Fetched live from OpenAlex and de-inverted. Abstracts are not stored in this database: the inverted indexes are 8.6 GB of the frame’s 9.3 GB of text, and the host has 13 GB free.
How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.005 | 0.021 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.001 |
| Bibliometrics | 0.002 | 0.003 |
| Science and technology studies | 0.002 | 0.001 |
| Scholarly communication | 0.003 | 0.002 |
| Open science | 0.001 | 0.002 |
| Research integrity | 0.001 | 0.002 |
| Insufficient payload (model declined to judge) | 0.009 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".