Cooperation between Corporations and Environmental Groups: a Transaction Cost Perspective

Theory suggests that when transaction costs are low, corporations and stakeholders can minimize social costs by transacting to their mutual advantage, but when transaction costs are high, reducing social costs requires the intervention of a centralized institution. In surprisingly little work have scholars considered what happens in between—when transaction costs exist but recourse to hierarchical institution is barred. I use transaction cost analysis to hypothesize how collaboration between corporations and environmental stakeholder groups will be structured.