Capabilities, Transaction Costs, and Firm Boundaries: An Integrative Theory
Year: 2011
Type: preprint
Abstract: While the literature on firm boundaries has been greatly influenced by transaction cost economics, strategy scholars often emphasize the importance of capabilities considerations in these decisions. This has led to a debate that, we suggest, has generated more heat than light. We argue that the two sets of considerations are in fact so intertwined dynamically that treating them as independent, competitive explanations is fundamentally misleading. We offer a theoretical synthesis of transaction cost and capabilities approaches to firm boundaries that seeks to overcome each approach’s limitations, and provides a unified and logically consistent understanding of boundary decisions.
Source: SSRN Electronic Journal
Authors: Nicholas Argyres, Todd Zenger
Institutions: Washington University in St. Louis, University of Utah
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1590396970