Civic capital and service outsourcing: Evidence from Italy

This paper studies whether civic capital is an effective restraint against opportunistic behaviour in business-to-business transactions by looking at the firm-level degree of service outsourcing in Italy. Our results show that firms tend to outsource more services in areas where civic capital is higher. We claim that the rise in the propensity to engage in transactions with outside service suppliers stems from the decrease in opportunism between the parties involved.