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

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  • Bruce Heiman
  • Jack Nickerson
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    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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    Bibliographic Info

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

    Volume (Year): 9 (2002)
    Issue (Month): 1 ()
    Pages: 97-116

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    Handle: RePEc:taf:ijecbs:v:9:y:2002:i:1:p:97-116

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    Related research

    Keywords: Interfirm Collaborations; Knowledge Management; Knowledge Transfer; Governance Choice;

    References

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    1. Christophe Van den Bulte & Rudy K. Moenaert, 1998. "The Effects of R&D Team Co-location on Communication Patterns among R&D, Marketing, and Manufacturing," Management Science, INFORMS, vol. 44(11-Part-2), pages S1-S18, November.
    2. Bruce Kogut & Udo Zander, 1993. "Knowledge of the Firm and the Evolutionary Theory of the Multinational Corporation," Journal of International Business Studies, Palgrave Macmillan, vol. 24(4), pages 625-645, December.
    3. 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.
    4. Eric von Hippel, 1994. ""Sticky Information" and the Locus of Problem Solving: Implications for Innovation," Management Science, INFORMS, vol. 40(4), pages 429-439, April.
    5. David Teece, 1977. "Time-Cost Tradeoffs: Elasticity Estimates and Determinants for International Technology Transfer Projects," Management Science, INFORMS, vol. 23(8), pages 830-837, April.
    6. 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.
    7. 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.
    8. 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.
    9. Richard L. Daft & Robert H. Lengel, 1986. "Organizational Information Requirements, Media Richness and Structural Design," Management Science, INFORMS, vol. 32(5), pages 554-571, May.
    10. Fleming, Lee & Sorenson, Olav, 2001. "Technology as a complex adaptive system: evidence from patent data," Research Policy, Elsevier, vol. 30(7), pages 1019-1039, August.
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    Cited by:
    1. Nickerson, Jack A. & Yen, C. James & Mahoney, Joseph T., 2011. "Exploring the Problem-Finding and Problem-Solving Approach for Designing Organizations," Working Papers 11-0107, University of Illinois at Urbana-Champaign, College of Business.
    2. Ghozzi, Houda, 2008. "Examining resource based view against transactional costs Approach in the french poultry industry : treading upon eggs," Economics Papers from University Paris Dauphine 123456789/2412, Paris Dauphine University.
    3. 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.
    4. Delmas, Magali & Marcus, Alfred, 2003. "Firms' Choice of Regulation Instruments to Reduce Pollution: A Tansaction Cost Approach," Research Papers 1806, Stanford University, Graduate School of Business.
    5. Li, Dan, 2013. "Multilateral R&D alliances by new ventures," Journal of Business Venturing, Elsevier, vol. 28(2), pages 241-260.
    6. 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.
    7. Xiaohua Yang & Elly Ho & Artemis Chang, 2012. "Integrating the resource-based view and transaction cost economics in immigrant business performance," Asia Pacific Journal of Management, Springer, vol. 29(3), pages 753-772, September.
    8. 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.

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