The Transaction Cost Theory of the (Multinational) Firm - Note

James H. Love

Journal of Institutional and Theoretical Economics (JITE), 1997, vol. 153, issue 4, 675-

Abstract: Ambiguities are identified in HALLWOOD's [1994] explanation of the existence of the multinational firm. Hallwood argues that internalization theory contains two critical implicit assumptions. The first of these is non-existent, and the second has been presented in a potentially misleading way. By appearing to draw a clear distinction between measurement costs and transaction costs, Hallwood obscures the important issue of information asymmetry and search costs in final product markets.

JEL-codes: D23 F23 (search for similar items in EconPapers)
Date: 1997
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