Approximating to the automobile industry paradigm

Michael S. Wynn-Williams

Chapter Chapter 6 in Surfing the Global Tide, 2009, pp 131-182 from Palgrave Macmillan

Abstract: Abstract The automobile industry paradigm described up to this point suggests strict conditions for the long-term sustainability of an automobile firm since it is constrained by parameters set by both economies of scale and vertical integration. So far, I have put forward a prototypical size and structure for an automobile firm operating closest to its optimum. This applies principles of economies of scale to indicate plant sizes which, in combination, provide a size for the firm. TCA is applied to indicate a full-function model of vertical integration. The full-function structure is effectively independent of firm size since it is related to the economic friction that exists between operations, thereby driving the make-or-buy decision.

Keywords: Foreign Direct Investment; Foreign Market; Vertical Integration; Home Market; Factor Endowment (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-23359-1_6

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DOI: 10.1057/9780230233591_6

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