Strategy and structure in interaction: What determines the boundaries of the firm?
AbstractThis paper analyzes empirically the boundaries of the firm based on Williamson's perspective on what determines firm size. It uses firm performance (risk-adjusted profitability and growth) as dependent variable; and firm organization, diseconomies of scale (atmospheric consequences, bureaucratic insularity, incentive limits, and communication distortion), economies of scale, and asset specificity as independent variables in a structural equation model. Data were collected from the 784 largest US manufacturing firms in 1998. The results confirm Williamson's framework and show that strategy and structure interact concurrently to determine the boundary of the firm.
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Bibliographic InfoPaper provided by EconWPA in its series Industrial Organization with number 0303003.
Length: 7 pages
Date of creation: 16 Mar 2003
Date of revision: 17 Mar 2003
Note: Type of Document - Acrobat PDF; pages: 7; figures: included
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transaction cost economics;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
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