Year: 1996
Type: article
Abstract: To analyse governance structures between banks and firms, the authors test the relevance of the concept of « quasi-integration » use in industrial economics to indicate an intermediate transaction between market and hierarchy. The criterion of information is here essential to study the relation between firms and banks. In a quasi-integration relationship, first information is shared and generates sunk costs, second the relation is a long term one, and last such a relation allow the firm to invest in innovative projects. Whereas in a market relationship, incentive is the principal form of coordination, in a hierarchy relationship, it is in fact authority. In the second part of the paper, we show that in a quasi-integration relationship, three forms of coordination are combined together : authority, incentive and trust. Because of this plurality, such governance structure leads to efficiency, by reducing internal uncertainty that burdens the transaction between banks and firms, and by promoting adaptability and flexibility when the environment is changing.
Source: Revue française d économie
Authors: Jean-Pierre Allegret, Bernard Baudry
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2008440259