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Freelance contracting in the digital age: informality, virtuality and social ties

Author

Listed:
  • Andrey Shevchuk

    (National Research University Higher School of Economics. Laboratory for Studies in Economic Sociology)

  • Denis Strebkov

    (National Research University Higher School of Economics. Laboratory for Studies in Economic Sociology)

Abstract

Based on a sample of 5,784 Russian-speaking respondents, this study provides the first quantitative evidence on freelance contracting via the Internet. We explore the extent to which these virtual business relations are formal or informal, and the role of social capital and networking. Our data suggest freelancers act under constant threat of malfeasance from clients. We address a number of questions associated with freelancers’ business risks and how freelancers might mitigate them. The logistic regression models reveal that the virtualization of relationships with clients is associated with greater moral hazard risks and fewer opportunities for dispute resolution. Formal written contracts do not prevent opportunistic behaviors by clients, though such contracts help resolve conflicts. Dealing with available social contacts and referrals decreases both the probability of extreme opportunism, causing financial losses, and the probability that disputes remain unresolved. Nevertheless, established social relations could be exploited by clients who can delay payments or insist on altering deadlines, work scope and specifications. Thus, our findings contribute to existing literatures on social capital in freelance contracting and on the structure of occupational labor markets.

Suggested Citation

  • Andrey Shevchuk & Denis Strebkov, 2013. "Freelance contracting in the digital age: informality, virtuality and social ties," HSE Working papers WP BRP 12/SOC/2013, National Research University Higher School of Economics.
  • Handle: RePEc:hig:wpaper:12/soc/2013
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    References listed on IDEAS

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    1. Susan N. Houseman, 2001. "Why Employers Use Flexible Staffing Arrangements: Evidence from an Establishment Survey," ILR Review, Cornell University, ILR School, vol. 55(1), pages 149-170, October.
    2. Shevchuk, Andrey & Strebkov, Denis, 2012. "Freelancers in Russia: Remote work patterns and e-markets," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 13(2), pages 37-45.
    3. Rory Donnelly, 2011. "The Organization of Working Time in the Knowledge Economy: An Insight into the Working Time Patterns of Consultants in the UK and the USA," British Journal of Industrial Relations, London School of Economics, vol. 49(Supplemen), pages 93-114, June.
    4. Arne Baumann, 2002. "Informal Labour Market Governance: the Case of the British and German Media Production Industries," Work, Employment & Society, British Sociological Association, vol. 16(1), pages 27-46, March.
    5. Radkevitch, U.L. & van Heck, H.W.G.M. & Koppius, O.R., 2008. "Choosing between Auctions and Negotiations in Online B2B Markets for IT Services: The Effect of Prior Relationships and Performance," ERIM Report Series Research in Management ERS-2008-004-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
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    Cited by:

    1. Zoya Kotelnikova, 2013. "Structural embeddedness and contractual relationships of chain stores and their suppliers in Russian emerging markets," HSE Working papers WP BRP 22/SOC/2013, National Research University Higher School of Economics.

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    More about this item

    Keywords

    freelancers; independent contractors; self-employment; Internet; opportunism; social capital;
    All these keywords.

    JEL classification:

    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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