The Firm as a Pool of Factor Complementarities

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The Firm as a Pool of Factor Complementarities

Author Info

Lindbeck, Assar (IIES, Stockholm University and IUI, Stockholm)
Snower, Dennis J. () (Birkbeck College, University of London, CEPR and IZA Bonn)

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Abstract

This paper presents a new approach to the theory of the firm by identifying factor complementarities as central to the determination of the firm’s boundaries. The factor complementarities may take a variety of forms: technological and informational complementarities, as well as economies of scale and scope. We examine the tradeoff between the gains from these complementarities and transactions costs. In so doing, we must abandon the standard dichotomy between the determinants of plant size and firm size. The influence of factor complementarities on firm size is examined in partial and general equilibrium frameworks.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 882.

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Length: 17 pages
Date of creation: Oct 2003
Date of revision:
Handle: RePEc:iza:izadps:dp882

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Related research
Keywords: firm; complementarities; plant;

Other versions of this item:

Paper
- Lindbeck, Assar & Snower, Dennis, 2003. "The Firm as a Pool of Factor Complementarities," Seminar Papers 725, Stockholm University, Institute for International Economic Studies. [Downloadable!]
- Lindbeck, Assar & Snower, Dennis J., 2003. "The Firm as a Pool of Factor Complementarities," Working Paper Series 598, Research Institute of Industrial Economics. [Downloadable!]
- Assar Lindbeck & Dennis Snower, 2003. "The Firm as a Pool of Factor Complementarities," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
- Lindbeck, Assar & Snower, Dennis J., 2004. "The Firm as a Pool of Factor Complementarities," CEPR Discussion Papers 4242, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)

Find related papers by JEL classification:
D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence

This paper has been announced in the following NEP Reports:

NEP-ALL-2003-10-12 (All new papers)
NEP-ENT-2003-10-12 (Entrepreneurship)
NEP-LAB-2003-10-12 (Labour Economics)

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.:

Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-95, December. [Downloadable!] (restricted)
Other versions:
- Armen A. Alchian & Harold Demsetz, 1971. "Production, Information Costs and Economic Organizations," UCLA Economics Working Papers 10A, UCLA Department of Economics. [Downloadable!]
Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law & Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
Bolton, Patrick & Dewatripont, Mathias, 1994. "The Firm as a Communication Network," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 809-39, November. [Downloadable!] (restricted)
Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August. [Downloadable!] (restricted)
Other versions:
- Grossman, Sanford J & Hart, Oliver, 1985. "The Cost and Benefits of Ownership: A Theory of Vertical and Lateral Integration," CEPR Discussion Papers 70, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Oliver Hart & Sanford Grossman, 1985. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Working papers 372, Massachusetts Institute of Technology (MIT), Department of Economics.
Lindbeck, Assar & Snower, Dennis J, 1996. "Reorganization of Firms and Labor-Market Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 315-21, May.
Other versions:
- Lindbeck, A. & Snower, D.J., 1995. "Reorganization of Firms and Labor Market Inequality," Research Institute of Industrial Economics Working Papers 448, Research Institute of Industrial Economics (IFN).
- Lindbeck, Assar & Snower, Dennis J., 1996. "Reorganization of Firms and Labour Market Inequality," CEPR Discussion Papers 1375, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
- Lindbeck, A. & Snower, D.J., 1996. "Reorganization of Firms and Labor Market Inequality," Papers 605, Stockholm - International Economic Studies.
- Lindbeck, Assar & Snower, Dennis J., 1997. "Reorganization of Firms and Labor Market Inequality," Seminar Papers 605, Stockholm University, Institute for International Economic Studies. [Downloadable!]
Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn. [Downloadable!] (restricted)

Full references

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.)

Horst Raff & Michael Ryan, 2006. "Firm-Specific Characteristics and the Timing of Foreign Direct Investment Projects," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
Other versions:
- Ryan, Michael & Raff, Horst, 2007. "Firm-Specific Characteristics and the Timing of Foreign Direct Investment Projects," Economics Working Papers 2007,22, Christian-Albrechts-University of Kiel, Department of Economics. [Downloadable!]
- Horst Raff & Michael J. Ryan, 2008. "Firm-Specific Characteristics and the Timing of Foreign Direct Investment Projects," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(1), pages 1-31, April. [Downloadable!] (restricted)
Constantinescu, Madalina, 2008. "Knowledge Management through the Lens of Innovation and Labour Productivity in a Knowledge Based Economy," MPRA Paper 8930, University Library of Munich, Germany. [Downloadable!]
Other versions:
- Madalina Constantinescu, 2008. "Knowledge Management Through The Lens Of Innovation And Labour Productivity In A Knowledge Based Economy," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 3(2(4)_Summ). [Downloadable!]
Werner Hölzl, 2005. "The evolutionary theory of the firm: Routines, complexity and change," Working Papers geewp46, Vienna University of Economics and B.A. Research Group: Growth and Employment in Europe: Sustainability and Competitiveness. [Downloadable!]
Alla Lileeva & Johannes Van Biesebroeck, 2008. "Outsourcing when Investments are Specific and Complementary," NBER Working Papers 14477, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Other versions:
- Alla Lileeva & Johannes Van Biesebroeck, 2007. "Outsourcing when Investments are Specific and Complementary," Working Papers tecipa-287, University of Toronto, Department of Economics. [Downloadable!]

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