Span of control, transaction costs and the structure of production chains

Tomoo Kikuchi (), Kazuo Nishimura and John Stachurski ()
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Tomoo Kikuchi: Lee Kuan Yew School of Public Policy, National University of Singapore
John Stachurski: Research School of Economics, Australian National University

Theoretical Economics, 2018, vol. 13, issue 2

Abstract: This paper builds coordination costs, transaction costs and other aspects of the theory of the firm into a production chain model with an infinite number of ex ante identical producers. The equilibrium determines prices, allocations of productive tasks across firms, firm sizes, and the number of active firms. These prices and allocations match several stylized facts on firm boundaries, vertical integration, and division of the value chain.

Keywords: Span of control; firm boundaries; fragmentation; distribution of firms (search for similar items in EconPapers)
JEL-codes: C62 C63 L11 L16 (search for similar items in EconPapers)
Date: 2018-05-29
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Citations: View citations in EconPapers (14)

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