The Firm as a Pool of Factor Complementarities

Assar Lindbeck and Dennis Snower ()

No 598, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper presents a new approach to the theory of the firm by identifying factor complementarities as central to the determination of the firm's boundaries. The factor complementarities may take a variety of forms: technological and informational complementarities, as well as economies of scale and scope. We examine the tradeoff between the gains from these complementarities and transactions costs. In so doing, we must abandon the standard dichotomy between the determinants of plant size and firm size. The influence of factor complementarities on firm size is examined in partial and general equilibrium frameworks.

Keywords: Boundary of Firm; Complementarities of Production; Transaction Costs (search for similar items in EconPapers)
JEL-codes: D20 D40 D80 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ent
Date: 2003-06-10
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Related works:
Working Paper: The Firm as a Pool of Factor Complementarities (2003)
Working Paper: The Firm as a Pool of Factor Complementarities (2003)
Working Paper: The Firm as a Pool of Factor Complementarities (2003)
Working Paper: The Firm as a Pool of Factor Complementarities (2004)
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Persistent link: http://EconPapers.repec.org/RePEc:hhs:iuiwop:0598

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