Transaction Cost Economics (TCE) and the Family Firm

Alain Verbeke and Liena Kano

Entrepreneurship Theory and Practice, 2010, vol. 34, issue 6, 1173-1182

Abstract: Gedajlovic and Carney's application of transaction cost economics (TCE) thinking to the family business builds on TCE's concept of asset specificity. Our analysis augments this application. We focus on TCE's behavioral assumptions, which act as drivers of failed human commitments. We show that both the exposure and response to bounded rationality and bounded reliability challenges may be different in family firms versus Chandlerian hierarchies, and introduce the new concept of family–based human asset specificity.

Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:34:y:2010:i:6:p:1173-1182

DOI: 10.1111/j.1540-6520.2010.00419.x

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