Towards Reconciling Transaction Cost Economics and the Knowledge-based View of the Firm: The Context of Interfirm Collaborations

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Towards Reconciling Transaction Cost Economics and the Knowledge-based View of the Firm: The Context of Interfirm Collaborations

Author Info

Bruce Heiman
Jack A. Nickerson

Abstract

This paper presents a set of relationships that have the potential to reconcile the dispute between the knowledge-based view of the firm (KBV) and transaction cost economics (TCE). Several KBV scholars have argued that governance choice need rely only on bounded rationality and not on opportunism where TCE scholars maintain that both behavioural assumptions are needed to explain governance choice.We help to resolve part of the debate by developing an extension ofTCE to encompass certain knowledge-based attributes of transactions.We argue that high-levels of two knowledge transfer attributes - knowledge tacitness or problem solving complexity - lead to the adoption of the knowledge management practices - high-bandwidth channels or idiosyncratic communication codes - to economize on the cognitive limitations of man. It is these knowledge management practices that generate contracting hazards for whichTCE, and its attendant concern about opportunism, predicts equity-based collaborations are superior to non-equity-based collaborations.The linkages between knowledge transfer attributes, knowledge management practices, and governance choice add value via implications for managers which are not readily apparent from either theory alone.

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Article provided by Taylor and Francis Journals in its journal International Journal of the Economics of Business.

Volume (Year): 9 (2002)
Issue (Month): 1 (February)
Pages: 97-116
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Handle: RePEc:taf:ijecbs:v:9:y:2002:i:1:p:97-116

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Riordan, Michael H. & Williamson, Oliver E., 1985. "Asset specificity and economic organization," International Journal of Industrial Organization, Elsevier, vol. 3(4), pages 365-378, December. [Downloadable!] (restricted)
Oxley, Joanne E, 1997. "Appropriability Hazards and Governance in Strategic Alliances: A Transaction Cost Approach," Journal of Law, Economics and Organization, Oxford University Press, vol. 13(2), pages 387-409, October.
Bruce Kogut & Udo Zander, 1993. "Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 24(4), pages 625-645, December. [Downloadable!] (restricted)
Teece, David J., 1986. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 15(6), pages 285-305, December. [Downloadable!] (restricted)
Winter, Sidney G, 1988. "On Coase, Competence, and the Corporation," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(1), pages 163-80, Spring.

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Bruce A. Heiman & Jack A. Nickerson, 2004. "Empirical evidence regarding the tension between knowledge sharing and knowledge expropriation in collaborations," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 25(6-7), pages 401-420. [Downloadable!]
Foss, Nicolai J. & Pedersen, Torben, 2001. "The MNC as a Knowledge Structure: The Roles of Knowledge Sources and Organizational Instruments for Knowledge Creation and Transfer," Working Papers 12-2001, Copenhagen Business School, Department of International Economics and Management. [Downloadable!]
Annick Willem & Marc Buelens, 2003. "Making competencies cross business unit boundaries: the interplay between inter-unit coordination, trust and knowledge transferability," Vlerick Leuven Gent Management School Working Paper Series 2003-10, Vlerick Leuven Gent Management School. [Downloadable!]
A. Willem & M. Buelens, 2003. "Making Competencies Cross Business Unit Boundaries: The Interplay between Inter-Unit Coordination, Trust and Knowledge Transferability," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/176, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]

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