In this paper the two canonical theories of the firm transaction costs economics and the knowledge-based view of the firm – predictions on ‘make-or-buy’ are tested on the news industry. The news industry provides an interesting case on which to test the two theories since it is characterized by a high degree of urgency. Urgency refers to the need to catch and process inputs fast. A tendency tha...

The paper examines the significance of enforceability and adaptability in governing vertical alliances and their performance ramifications for suppliers. Literature on supplier relations suggests that suppliers are skeptical of close ties with their buyers (Helper 1991, Helper and Sako 1995). Such skepticism persists in spite of the fact that buyers are writing longer (enforceable) contracts wi...

In this paper, we integrate the equilibrium predictions of transaction cost economics and the intertemporal predictions of structural inertia theory to derive content-based predictions of the direction, rate, and amount of organizational adaptation. Specifically, we predict that poorly aligned firms (according to transaction cost principles) realize lower survival rates and lower profits than t...

In this era of globalization we see an increase in specialization: the production chain is split up in more and more parts and the production of these parts is outsourced to those places in the world where production is relatively the cheapest and most efficient. This implies that transaction costs, associated with the coordination of production and trade in parts and components, become increas...

Although supplier alliances are widely considered as an effective source of competitive advantage by firms operating in uncertain business environments, the literature offers inconsistent suggestions concerning how environmental uncertainty affects supplier alliances. The framework of transaction cost economics (TCE) suggests that, when environmental uncertainty is present to a nontrivial but n...

Due to limited financial resources of governments, Public Private Partnerships (PPPs) have emerged as one of the most important ways of delivering infrastructure projects. Compared to traditional delivery approaches, PPPs bundle complex investments and service provisions with different project entities in a single long-term contract. Because of these special characteristics, many transactions h...

Prior literature on the diversification discount and the relative efficiency of internal versus external capital markets provides decidedly mixed results. We argue that transactions cost economics are useful in understanding this puzzle. According to transactions cost economics, diversified firms should outperform single-segment firms in industries with higher external transaction costs (e.g., ...

the purpose of this study is to assess the transaction cost of borrowing from non-governmental investment development funds which are established in less than a decade. transaction costs are considered as significant and limiting factors for micro-borrowers in using formal loans. the required data are provided by the investment developing support’s parent company using the stratified random sam...