Linear DNA is beneficial during homologous recombination, as it is able to recombine into the host bacterium chromosome. This is ideal, as homologous recombination can be exploited to genetically modify bacteria.
Plasmids have a higher transformation efficiency, and are generally favoured for introducing genes into bacteria due to their ease of transformation. It is also possible to design temperature sensitive plasmids, which allow their selective degradation at varying growth temperatures - this is used with the pKD46 plasmid used during lambda red recombineering.
Linear DNA has a lower transformation efficiency due to it being prone to exonuclease degradation. This is a defence mechanism employed by bacteria to prevent damage by foreign DNA. During lambda red recombineering, gam binds to RecBCD, inhibiting the host’s exonuclease activity. This helps reduce the degradation of linear DNA and improve the transformation efficiency. Linear DNA can easily have the flanking homologous regions attached, using oligonucleotide primers allowing the amplification of both the gene of interest and the regions of homology during PCR. This could allow the insertion of a template gene into multiple locations with different primers - reducing complexity and cost.