On the Transaction Cost Determinants of Vertical Integration

Michael Whinston

The Journal of Law, Economics, and Organization, 2003, vol. 19, issue 1, 1-23

Abstract: The transaction cost approach to the organization of firms has been among the most significant advances in industrial organization in the last 25 years. Much of this work has taken the transaction cost economics view of Williamson (1975, 1979, 1985) and Klein, Crawford, and Alchian (1978) in which high levels of quasi-rents are taken to increase the likelihood of vertical integration. More recently, however, the more formal property rights theory of Grossman and Hart (1986) and Hart and Moore (1990) has received considerable attention as a theory of integration. This article explores the predictions of property rights theory to assess what the extensive supporting evidence on transaction cost economics tells us about the property rights theory's empirical relevance. The article concludes that this evidence sheds little light on the relevance of the property rights theory and discusses how we might try to learn more. Copyright 2003, Oxford University Press.

Date: 2003
References: Add references at CitEc
Citations: View citations in EconPapers (102)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:jleorg:v:19:y:2003:i:1:p:1-23

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Journal of Law, Economics, and Organization is currently edited by Andrea Prat

More articles in The Journal of Law, Economics, and Organization from Oxford University Press Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK.
Bibliographic data for series maintained by Oxford University Press ().