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ToolsLyons, B.R. (1995) Specific investment, economies of scale, and the make-or-buy decision:A test of transaction cost theory. Journal of Economic Behavior and Organization, 26 (3). pp. 431-443. ISSN 0167-2681
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This paper develops empirical tests of three hypotheses arising from transaction cost theory, as developed by Oliver Williamson. Evidence is provided from a new dataset on 178 inputs gathered from UK engineering firms. The probability of buying-in specialised inputs is higher if the production technology is non-specific, but only if there are economies of scale or scope. Furthermore, the economies of scale/scope effect is much reduced in the presence of specific assets. This interactive hypothesis has not been formally tested before. We also believe this to be the first cross-section empirical test of transaction cost make-or-buy theory using European data.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | contracts,specific assets,transaction costs |
| Faculty \ School: | Faculty of Social Sciences > School of Economics |
| UEA Research Groups: | Faculty of Social Sciences > Research Groups > Industrial Economics Faculty of Social Sciences > Research Centres > Centre for Competition Policy |
| Related URLs: | |
| Depositing User: | Pure Connector |
| Date Deposited: | 22 Nov 2013 14:32 |
| Last Modified: | 17 May 2023 00:56 |
| URI: | https://ueaeprints.uea.ac.uk/id/eprint/44443 |
| DOI: |
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