The Internal Organization of the Firm, Transaction Costs and Macroeconomic Growth
AbstractThis paper proposes an analysis of the links between the internal organization of firms and macroeconomic growth. We present a Schumpeterian growth model in which firms face agency costs. These agency costs are due to the existence of asymmetries of information and the formation of internal vertical collusions. As a response to the opportunity of internal collusion, optimal incentive contracts depend on the efficiency of collusive side contracting within organizations. This un turn affects the firms profitability and the return to innovation and the stationary equilibrium growth rate of the economy. We then discuss the relationships between the structure of internal transaction costs, organizational technologies and macroeconomic growth.
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Bibliographic InfoPaper provided by DELTA (Ecole normale supérieure) in its series DELTA Working Papers with number 1999-08.
Date of creation: 1999
Date of revision:
Publication status: Published in Journal of Economic Growth, 2000, 5, pp, 315-340.
Other versions of this item:
- Martimort, David & Verdier, Thierry, 2000. " The Internal Organization of the Firm, Transaction Costs, and Macroeconomic Growth," Journal of Economic Growth, Springer, vol. 5(4), pages 315-40, December.
- Martimort, D. & Verdier, T., 1999. "The Internal Organization of the Firm, Transaction Costs and Macroeconomic Growth," Papers 1999-08, Laval - Laboratoire Econometrie.
- D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
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- Francois, P. & Lloyd-Ellis, H., 2003. "Co-movement, Capital and Contracts: 'Normal' Cycles Through Creative Destruction," Discussion Paper 2003-62, Tilburg University, Center for Economic Research.
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