How do firm resources affect transaction governance?
The authors develop a theory of transaction governance that integrates transaction cost economics (TCE) with the resource-based view of the firm (RBV). Their theory considers: (i) the transaction costs that emerge from asset specificity; (ii) the rent-creation potential of firm-specific resources; and (iii) the costs of developing the resources that are required for a transaction. Their synthesis of TCE and RBV leads to predictions about firm boundaries that differ from the ones made by TCE alone.
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