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Property rights theory, transaction costs theory, and agency theory: an organizational economics approach to strategic management

  • Jongwook Kim

    (Western Washington University, Bellingham, USA)

  • Joseph T. Mahoney

    (University of Illinois at Urbana-Champaign, Champaign, USA)

Registered author(s):

    Property rights theory has common antecedents with contractual theories of the firm such as transaction costs and agency theories, and is yet distinct from these theories. We illustrate fundamental theoretical principles derived from these three theories by analyzing the business case of oil field unitization. Theoretical principles and application of theory to oil field unitization are each summarized. From this, it is possible to see how property rights theory is well suited to explain business situations where inefficient economic outcomes persist. Additionally, property rights theory forges new theoretical connections with other branches of organizational economics, in particular, resource-based theory. Copyright © 2005 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/mde.1218
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    Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

    Volume (Year): 26 (2005)
    Issue (Month): 4 ()
    Pages: 223-242

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    Handle: RePEc:wly:mgtdec:v:26:y:2005:i:4:p:223-242
    Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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