The Internal Organization of the Firm, Transaction Costs, and Macroeconomic Growth
This article analyzes the links between the internal organization of the firm and macroeconomic growth. We present a Schumpeterian growth model in which firms face agency costs due to the existence of asymmetries of information and the formation of vertical collusions inside those firms. To respond to the threat of collusion, optimal collusion-proof incentive contracts depend on the efficiency of collusive side contracting within organizations. Collusion affects therefore the firms' profitability, the incentives to innovate, and, finally, the stationary equilibrium growth rate of the economy. On the other hand, when the growth rate is small, the prospects of long-term relationships within firms increase the agents' incentives to invest in a better collusive technology. We then discuss the two-way relationships between the structure of internal transaction costs, organizational technologies, and macroeconomic growth. Copyright 2000 by Kluwer Academic Publishers
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:kap:jecgro:v:5:y:2000:i:4:p:315-40. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.