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How Relevant is Transaction Cost Economics to Inter-Firm Relationships in the Music Industry?

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  • Jonathan Gander
  • Alison Rieple

Abstract

This paper applies the transaction cost framework to the organisation of product sourcing and development (PS&D) activities within the popular music industry. Two firm types characterise the industry and this particular set of activities; large multinational firms (`majors') and smaller regionally bound companies (`independents'). We find that the Transaction CostEconomies framework of Oliver Williamson (1985, 1999) provides only a partial explanation for the observed hybrid organisational structures established by the two firm types. A more sensitive model can be achieved by including a number of moderating variables drawn from the socially constructed and situationally dependent idiosyncrasies of the assets involved in the PS&D activities under consideration. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Jonathan Gander & Alison Rieple, 2004. "How Relevant is Transaction Cost Economics to Inter-Firm Relationships in the Music Industry?," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 28(1), pages 57-79, February.
  • Handle: RePEc:kap:jculte:v:28:y:2004:i:1:p:57-79
    DOI: 10.1023/B:JCEC.0000009958.80454.f6
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    References listed on IDEAS

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    1. Hodgson, Geoffrey M., 1998. "Competence and contract in the theory of the firm," Journal of Economic Behavior & Organization, Elsevier, vol. 35(2), pages 179-201, April.
    2. Eric Strobl & Clive Tucker, 2000. "The Dynamics of Chart Success in the U.K. Pre-Recorded Popular Music Industry," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 24(2), pages 113-134, May.
    3. Andrew Burke, 1996. "The dynamics of product differentiation in the British record industry," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 20(2), pages 145-164, June.
    4. Coase, R H, 1992. "The Institutional Structure of Production," American Economic Review, American Economic Association, vol. 82(4), pages 713-719, September.
    5. Robert D. Dewar & Jane E. Dutton, 1986. "The Adoption of Radical and Incremental Innovations: An Empirical Analysis," Management Science, INFORMS, vol. 32(11), pages 1422-1433, November.
    6. Bengt Holmstrom & John Roberts, 1998. "The Boundaries of the Firm Revisited," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 73-94, Fall.
    7. Throsby, David, 1994. "The Production and Consumption of the Arts: A View of Cultural Economics," Journal of Economic Literature, American Economic Association, vol. 32(1), pages 1-29, March.
    8. Hamlen, William A, Jr, 1991. "Superstardom in Popular Music: Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 729-733, November.
    9. Huascar Pessali & Ramon Fernandez, 2005. "Institutional Economics at the Micro Level? What Transaction Costs Theory Could Listen From Original Institutionalism (In the Spirit of Building Bridges)," Method and Hist of Econ Thought 0511001, EconWPA.
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    Cited by:

    1. Bakker, Gerben, 2012. "Adopting the rights-based model: music multinationals and local music industries since 1945," Economic History Working Papers 47507, London School of Economics and Political Science, Department of Economic History.
    2. Brinja Meiseberg, 2014. "Trust the artist versus trust the tale: performance implications of talent and self-marketing in folk music," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 38(1), pages 9-42, February.
    3. Rieple, Alison & Helm, Clive, 2008. "Outsourcing for competitive advantage: An examination of seven legacy airlines," Journal of Air Transport Management, Elsevier, vol. 14(5), pages 280-285.
    4. Julia Hiscock & David E. Hojman, 2004. "Where Have All the Flowers Gone? Coase Theorem Failures in English Summer Cultural Events: The Case of Sidmouth International Festival," Research Papers 200406, University of Liverpool Management School.
    5. Arai Koki, 2013. "Analyzing the Motivations of a Joint Venture to Provide High-Quality Music Download Service to Mobile Phones," Asian Journal of Law and Economics, De Gruyter, vol. 4(1-2), pages 1-31, December.

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