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Supplier Switching Costs and Vertical Integration in the Automobile Industry

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Author Info
Kirk Monteverde
David J. Teece
Abstract

This article tests a transactions cost theory of vertical integration with data from the U.S. automobile industry. Existing theory is first refined to take into account industrial know-how and the cost of transferring such know-how. A testable model is then developed, which is estimated by using probit techniques. The results support the view that transactions cost considerations surrounding the development and deepening of human skills have important ramifications for delineating efficient organizational boundaries.

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Publisher Info
Article provided by The RAND Corporation in its journal Bell Journal of Economics.

Volume (Year): 13 (1982)
Issue (Month): 1 (Spring)
Pages: 206-213
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Handle: RePEc:rje:bellje:v:13:y:1982:i:spring:p:206-213

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This page was last updated on 2009-11-13.

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