The Firm as a Pool of Factor Complementarities

Dennis Snower and Assar Lindbeck

No 4242, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This Paper presents a new approach to the theory of the firm by identifying factor complementarities as central to the determination of the firm?s boundaries. The factor complementarities may take a variety of forms: technological and informational complementarities, as well as economies of scale and scope. We examine the trade-off between the gains from these complementarities and transactions costs. In so doing, we must abandon the standard dichotomy between the determinants of plant size and firm size. The influence of factor complementarities on firm size is examined in partial and general equilibrium frameworks.

Keywords: Economies of scale and scope; Firm; Transaction costs; Factor complementarities (search for similar items in EconPapers)
JEL-codes: D21 D23 (search for similar items in EconPapers)
Date: 2004-02
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Related works:
Working Paper: The Firm as a Pool of Factor Complementarities (2003)
Working Paper: The Firm as a Pool of Factor Complementarities (2003)
Working Paper: The Firm as a Pool of Factor Complementarities (2003)
Working Paper: The Firm as a Pool of Factor Complementarities (2003)
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