Impacts of External Environmental Factors on the Collusive Team Scale in Bidding: The Case of China

Abstract

Collusive bidding is regarded as one of the construction sector’s most socially harmful, anticompetitive, and unsustainable practices. In this scheme, bidders are accustomed to varying their collusive team scale (CTS) with external environment (EE), and it consequently poses an overwhelming challenge for antitrust authorities to detect them. This study conducts an empirical analysis of the impacts of external environmental factors (EEFs) on the CTS from multiple perspectives with an aim to aid antitrust authorities in chasing collusive bidders’ behaviors in responding to the fluctuation of EE. The data were extracted from multiple sources, including 577 collusive bidding cases, statistical yearbooks of cities, governmental statistical bulletins, Baidu Maps, and enterprise information platforms in China. Although the impacts of EEFs on CTS are verified, it is found that the stronger the economic environment, the smaller the CTS; the more the industrial competition intensity and geographical advantages, the larger the CTS. The study also demonstrates the heterogeneous influence of competition intensity on the CTS among different project types. These research findings provide a stepping stone for noncollusion studies and favor antitrust authorities to formulate effective governance strategies.