Economic activities within and between networked organizations can be coordinated via hierarchies (internal coordination) or markets (external coordination). There are theories that explain both agency theory (Jensen transaction cost economics (Williamson, 1985). It is assumed that networked organizations design their organization and network of trading partners such that the sum of internal an...

This working paper provides a summary on transaction cost economics (TCE) and recent developments thereof. After an introductory discussion of TCE’s role within the field of New Institutional Economics, a critical analysis of the contribution of the existing body of empirical literature is conducted. In recent years, researchers have continued to develop and extend TCE. Williamson (1991b) intro...

This survey sketches the broad landscape of the field of transaction costs measurement. It surveys the main research areas concerning transaction costs and offers a taxonomy: monetary and financial economics, Williamsonian transaction cost economics, the transaction sector, non-market transaction costs, environmental and ecological economics, institutions and economic growth, and the economics ...

This paper offers an organizational perspective on the firm in new economic geographies. It starts with the premise of the firm as a production function in neoclassical economics and a cost minimisation device in transaction cost economics. By pointing out the inadequacy in these mainstream economic perspectives on the firm, I draw upon recent behavioral and managerial theories to develop a rel...

Ronald Coase’s landmark 1937 article, ‘‘The Nature of the Firm,’’ framed the study of organizational economics for decades. Coase asked three fundamental questions: Why do firms exist? What determines their boundaries? How should firms be organized internally? To answer the first question, Coase famously appealed to ‘‘the costs of using the price mechanism,’’ what we now call transaction costs ...