In the second stage regression (Equation (1)), these three contract-specific project characteristics are included in _X_ . The governance indices are also included, because governance affects not only the award criteria selection but also the possibility that either party involved would call for renegotiation. _DMULTI_ is replaced with the predicted probability given by Equation (2).

Table 8 summarizes the dependent and independent variables in our sample. It contains 106 concession transactions in the road and railway industries. The contract size differs considerably. The average size of road concessions is about 190 km with the maximum of over 1,200 km. Some railway concessions involve 8,000 km of tracks in total. The duration of concession varies from 8 to 40 years. Table 9 shows simple correlation between variables in our model.

<u>Table 8. Summary Statistics</u>

||||No.|Mean|Std.Dev.|Min|Max||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
||_D RENEG_||106|0.50|0.50|0|1||||||
||_D MULTI_||106|0.21|0.41|0|1||||||
||Road length (|km)|106|189.97|259.80|0.00|1234.00||||||
||Track length (|km)|106|645.07|1581.95|0.00|8029.00||||||
||Contract durat|ion (yea|r)<br>106|22.02|6.88|8.00|40.00||||||
||Unemploymen|t (perce|nt)<br>106|7.62|3.51|2.10|20.00||||||
||Govt effective|ness|106|0.17|0.42|-0.27|0.95||||||
||Regulatory qu|ality|106|0.73|0.30|0.39|1.30||||||
||Control of cor|ruption|106|0.01|0.58|-0.94|1.29||||||
||Memorandum|items:|||||||||||
||Country dumm|y|||||||||||
||<br>Argentina||106|0.28|0.45|0|1||||||
||Bolivia||106|0.02|0.14|0|1||||||
||Brazil||106|0.30|0.46|0|1||||||
||Chile||106|0.16|0.37|0|1||||||
||Colombia||106|0.03|0.17|0|1||||||
||Mexico||106|0.16|0.37|0|1||||||
||Peru||106|0.03|0.17|0|1||||||
||Uruguay||106|0.02|0.14|0|1||||||
||Sector dummy||||||||||||
||<br>Roads||106|0.71|0.46|0|1||||||
||Railway||106|029|046|0|1||||||
|||T|able 9. Sim|.<br>ple Co|.<br>rrelation||||||||
||(1)<br>(2)|(3)|(4)<br>(5)|(6)|(7)<br>(8)|(9)|(10)|(11)|(12)|(13)|(14)|(15)<br>(16)|
|(1) _D RENEG_|1||||||||||||
|(2) _D MULTI_|-0.08<br>1||||||||||||
|(3) Road length (km)|0.44<br>-0.27|1|||||||||||
|(4) Track length (km)|0.00<br>-0.04|-0.14|1||||||||||
|(5) Contract duration (year)|-0.19<br>-0.26|-0.22|0.38<br>1||||||||||
|(6) Unemployment (percent)|0.10<br>0.00|0.02|-0.02<br>-0.03|1|||||||||
|(7) Govt effectiveness|-0.03<br>0.27|0.10|-0.11<br>-0.14|0.13|1||||||||
|(8) Regulatory quality|-0.12<br>0.21|0.06|-0.10<br>-0.10|-0.09|0.94<br>1||||||||
|(9) Control of corruption|-0.15<br>0.05|0.10|-0.09<br>-0.07|-0.07|0.76<br>0.81|1|||||||
|(10) Argentina|0.48<br>-0.07|0.37|0.10<br>-0.15|0.39|0.27<br>0.18|-0.06|1||||||
|(11) Bolivia|-0.09<br>-0.11|-0.07|0.06<br>0.23|-0.13|-0.03<br>0.06|-0.21|-0.07|1|||||
|(12) Brazil|0.07<br>-0.39|0.12|0.11<br>0.15|0.09|-0.56<br>-0.60|-0.07|-0.23|-0.07|1||||
|(13) Chile|-0.23<br>0.14|0.01|-0.11<br>-0.04|-0.13|0.82<br>0.86|0.96|-0.18|-0.06|-0.19|1|||
|(14) Colombia|-0.02<br>0.34|-0.16|-0.09<br>-0.05|0.46|0.08<br>-0.18|-0.29|-0.19|-0.06|-0.20|-0.16|1||
|(15) Mexico|-0.23<br>0.10|-0.27|-0.05<br>-0.04|-0.64|-0.34<br>-0.16|-0.33|-0.31|-0.09|-0.33|-0.26|-0.27|1|
|(16) Peru|-0.02<br>-0.04|-0.05|0.04<br>0.15|0.03|-0.11<br>-0.01|-0.01|-0.07|-0.02|-0.07|-0.06|-0.06|-0.09<br>1|
|(17) Uruguay|-0.07<br>-0.08|-0.01|-0.03<br>-0.08|0.06|-0.06<br>0.06|0.09|-0.05|-0.01|-0.05|-0.04|-0.04|-0.07<br>-0.01|

19