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From Rent-Seeking Activities to Economic Activities: The Strategic Transformation of the Deregulated Firm

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  • QUELIN, Bertrand V.
  • BONARDI, Jean-Philippe

Abstract

The political theory of regulation holds that deregulation of utilities obliges the former monopoly to abandon its rent-seeking activities to concentrate upon economic activities. However, the arguments presented by scholars to explain this strategic transformation are not entirely convincing. We argue in this paper that the role and the nature of the firm during the deregulation process have been underestimated in previous works. After describing the main steps of this process, we thus propose a dynamic explanation of the strategic transformation of the deregulated firm based on the concepts of firm capabilities, access to rents and transaction costs.

Suggested Citation

  • QUELIN, Bertrand V. & BONARDI, Jean-Philippe, 1999. "From Rent-Seeking Activities to Economic Activities: The Strategic Transformation of the Deregulated Firm," HEC Research Papers Series 680, HEC Paris.
    • Handle: RePEc:ebg:heccah:0680
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    References listed on IDEAS

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    1. Eggertsson,Thrainn, 1990. "Economic Behavior and Institutions," Cambridge Books, Cambridge University Press, number 9780521348911, January.
    2. Raul Fabella, 1989. "Monopoly deregulation in the presence of Tullock activities," Public Choice, Springer, vol. 62(3), pages 287-293, September.
    3. Priest, George L, 1993. "The Origins of Utility Regulation and the "Theories of Regulation" Debate," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 289-323, April.
    4. Nicolai J. Foss, 1994. "Why transaction cost economics needs evolutionary economics," Revue d'Économie Industrielle, Programme National Persée, vol. 68(1), pages 7-26.
    5. Eliasson, G, 1991. "Deregulation, Innovative Entry and Structural Diversity as a," Journal of Evolutionary Economics, Springer, vol. 1(1), pages 49-63, January.
    6. Douglass C. North, 1990. "A Transaction Cost Theory of Politics," Journal of Theoretical Politics, , vol. 2(4), pages 355-367, October.
    7. Stanley M. Besen & Joseph Farrell, 1994. "Choosing How to Compete: Strategies and Tactics in Standardization," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 117-131, Spring.
    8. Noll, Roger G., 1989. "Economic perspectives on the politics of regulation," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 22, pages 1253-1287, Elsevier.
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    Keywords

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    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

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