Technological Change and the Boundaries of the Firm
Abstract
The authors examine a firm's decision either to produce an essential input itself or to hire a subcontractor to produce the input. The authors focus on how this decision is affected by technological change in the industry. In general, cost-reducing technological change leads the firm to produce the input itself more often. The firm's calculus is shown to depend on whether the subcontractor's skills are idiosyncratic or transferable. In the latter case, technological progress can even be detrimental to the firm and to society as a whole. Copyright 1991 by American Economic Association.Download Info
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Bibliographic Info
Article provided by American Economic Association in its journal American Economic Review.
Volume (Year): 81 (1991)
Issue (Month): 4 (September)
Pages: 887-900
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Yang, X. & Liu, P.W., 1999.
"Division of Labor Transaction Cost, Emergence of the Firm and Firm Size,"
Papers
10, Chicago - Graduate School of Business.
- Pak-Wai Liu & Xiaokai Yang, 1999. "Division of Labor, Transaction Cost, Emergence of the Firm and Firm Size," CID Working Papers 10, Center for International Development at Harvard University.
- Kerschbamer, Rudolf & Maderner, Nina & Tournas, Yanni, 2002. "Idiosyncratic investments, outside opportunities and the boundaries of the firm," International Journal of Industrial Organization, Elsevier, vol. 20(8), pages 1119-1141, October.
- Gamal Atallah, 2002.
"Production Technology, Information Technology, and Vertical Integration Under Asymmetric Information,"
Working Papers
0203EClassification-JEL: , University of Ottawa, Department of Economics.
- Gamal Atallah, 2002. "Production Technology, Information Technology, and Vertical Integration under Asymmetric Information," CIRANO Working Papers 2002s-32, CIRANO.
- Langlois, Richard N & Foss, Nicolai J, 1999.
"Capabilities and Governance: The Rebirth of Production in the Theory of Economic Organization,"
Kyklos,
Wiley Blackwell, vol. 52(2), pages 201-18.
- Richard N. Langlois & Nicolai J. Foss, 1997. "Capabilities and Governance the Rebirth of Production in the Theory of Economic Organization," DRUID Working Papers 97-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
- Richard N. Langlois & Nicolai J. Foss, 1996. "Capabilities and Governance the Rebirth of Production in the Theory of Economic Organization," Working papers 1996-02, University of Connecticut, Department of Economics.
- Ann Bartel & Saul Lach & Nachum Sicherman, 2005.
"Outsourcing and Technological Change,"
NBER Working Papers
11158, National Bureau of Economic Research, Inc.
- Bartel, Ann P & Lach, Saul & Sicherman, Nachum, 2005. "Outsourcing and Technological Change," CEPR Discussion Papers 5082, C.E.P.R. Discussion Papers.
- Bartel, Ann P. & Lach, Saul & Sicherman, Nachum, 2009. "Outsourcing and Technological Change," IZA Discussion Papers 4678, Institute for the Study of Labor (IZA).
- Kerschbamer, Rudolf & Maderner, Nina & Tournas, Yanni, 2000. "Idiosyncratic Investments, Outside Opportunities and the Boundaries of the Firm," CEPR Discussion Papers 2558, C.E.P.R. Discussion Papers.
- Liu, Pak-Wai & Yang, Xiaokai, 2000. "The theory of irrelevance of the size of the firm," Journal of Economic Behavior & Organization, Elsevier, vol. 42(2), pages 145-165, June.
- Yun, Mikyung, 1999. "Subcontracting relations in the Korean automotive industry: risk sharing and technological capability," International Journal of Industrial Organization, Elsevier, vol. 17(1), pages 81-108, January.
- Yang, Xiaokai & Ng, Yew-Kwang, 1995. "Theory of the firm and structure of residual rights," Journal of Economic Behavior & Organization, Elsevier, vol. 26(1), pages 107-128, January.
- Eliasson, Gunnar & Eliasson, Åsa, 2004. "The Theory of the Firm and the Markets for Strategic Acquisitions," Ratio Working Papers 44, The Ratio Institute.
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