Do Firm Boundaries Matter?

Cost management across firm boundaries

For most companies the costs of purchased goods and services have come to account for the main part of total costs. The primary driving force underlying this development is the increasing reliance on outsourcing, making efficient purchasing activities of crucial importance for the financial performance of companies. Therefore, Monczka and Morgan (2000) argue that there must be an ‘absolute link...

Collaborating across Boundaries in a Global Economy: Do Organizational Boundaries and Country Contexts Matter?

As firms spend a growing part of their budgets on offshore activities, they experience pressure to source increasingly more complex, less codified, and more strategic IT projects abroad. Successfully completing such projects requires close collaboration among all participants. It has been argued that firms are better off keeping such projects within their organizational boundaries by setting up...

Determinants of New Firm Formation: Does Location Matter?

The link between location features and the propensity to start a new firm is a subject that did not get much attention in Iran until recently. This paper is the first attempt on this proposition and is concerned with deliberating the effect of demographical and industrial characteristics of location on start-up rates in Iranian manufacturing industries. To fulfill this aim, regional panel data ...

What Determines Firm Boundaries in Biotech?

Incomplete Contracts and Firm Boundaries: New Directions

The seminal work by Grossman and Hart (1986 “The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration”, 94 Journal of Political Economy 691–19.) made the study of firm boundaries susceptible to formal economic analysis, and illuminated an important role for markets in providing incentives. In this essay, I discuss some new directions that the literature has taken since....