McHardy, J.P., Dietrich, M. and Krafft, J. (2015) Real firms, transaction costs and firm development: a suggested formalisation. Working Paper. The Sheffield Economic Research Paper Series (SERPS) . Department of Economics, University of Sheffield ISSN 1749-8368
Abstract
The motivation of this discussion is threefold: to integrate transaction costs (TCs) into a standard model of the firm; to examine the interaction between organisational factors (i.e. TCs) and standard demand-cost factors; and to analyse key propositions of transaction cost economics with the general model. Two sets of results are derived. First, when analysis is based on significant interaction between organisational effort and production costs two possible organisational solutions can exist. First we have a “normal” relationship that the existence of small firms is subject to a threshold effect for transaction complexity. Secondly large firms can develop because of interactions between organisation effort and marketing and production costs. A second key result concerns strategies to shift from small to large solutions that can be based on either “small steps” or “developmental leap”. The viability of these alternatives is shown to depend on transaction complexity that affects the transition costs involved. In short these findings collectively indicate that analysis of the interaction between organisational and technical aspects of the firm using a formal method does indeed add value in terms of our understanding.
Metadata
Item Type: | Monograph |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | The Sheffield Economic Research Paper Series (SERPS) offers a forum for the research output of the Department of Economics, University of Sheffield. Papers are reviewed for quality and presentation by two internal referees and a departmental editor. However, the contents and opinions expressed remain the responsibility of the author(s). Comments are welcomed and should be addressed to the individual author(s). |
Dates: |
|
Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 05 Feb 2015 16:28 |
Last Modified: | 05 Feb 2015 16:28 |
Published Version: | http://www.sheffield.ac.uk/economics/research/serp... |
Status: | Published |
Publisher: | Department of Economics, University of Sheffield |
Series Name: | The Sheffield Economic Research Paper Series (SERPS) |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:83321 |