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The determinants of the vertical boundaries of the construction firm: response

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Author Info
Adrian Bridge
Clem Tisdell

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Abstract

Chang seems to suggest that developing closer relations between Transaction Cost Economics (TCE) and the Resource-Based View (RBV) is not yet needed. However, we are unmoved in our belief that this development is compelling and remain committed to our approach to pluralism. We disagree with Chang's critiques of our approach. We clarify that a synthesis of TCE and RBV along the lines of theoretical monism is not attempted. On this basis, two of the three questions raised, labelled 'ontological dissonance’ and 'variable multicollinearity’, are not applicable. With regard to the other question that relates to refutability, Barney has shown that the variables are refutable and Barney also makes reference to empirical work pertaining to RBV. We agree with Chang that TCE is weak on differential production and believe that an acceptance of the coexistence of TCE and RBV is likely to make both theories more successful on the issue of vertical integration. In the end, pluralism appeals as much to us as it does to the chief proponents of TCE and RBV, as a means of making progress in the near term.

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Publisher Info
Article provided by Taylor and Francis Journals in its journal Construction Management & Economics.

Volume (Year): 24 (2006)
Issue (Month): 3 (March)
Pages: 233-236
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Handle: RePEc:taf:conmgt:v:24:y:2006:i:3:p:233-236

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Related research
Keywords: Construction firm; vertical boundaries; transaction costs; capability; competence;

References listed on IDEAS
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  1. Foss, Nicolai Juul, 1993. "Theories of the Firm: Contractual and Competence Perspectives," Journal of Evolutionary Economics, Springer, vol. 3(2), pages 127-44, May.
  2. Coase, R H, 1988. "The Nature of the Firm: Influence," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(1), pages 33-47, Spring.
  3. Oliver E. Williamson, 2002. "The Theory of the Firm as Governance Structure: From Choice to Contract," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 171-195, Summer. [Downloadable!] (restricted)
  4. Nicolai J. Foss, . "The Theory of the Firm: an Introduction to Themes and Contributions," IVS/CBS Working Papers 98-7, Department of Industrial Economics and Strategy, Copenhagen Business School. [Downloadable!]
  5. Chen-Yu Chang, 2006. "The determinants of the vertical boundaries of the construction firm: comment," Construction Management & Economics, Taylor and Francis Journals, vol. 24(3), pages 229-232, March. [Downloadable!] (restricted)
  6. Adrian J Bridge & Clem Tisdell, 2004. "The determinants of the vertical boundaries of the construction firm," Construction Management & Economics, Taylor and Francis Journals, vol. 22(8), pages 807-825, October. [Downloadable!] (restricted)
  7. Coase, R H, 2000. "The Acquisition of Fisher Body by General Motors," Journal of Law & Economics, University of Chicago Press, vol. 43(1), pages 15-31, April.
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This page was last updated on 2009-11-8.

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