Small Industries and Institutional Framework: A Transaction Costs Approach

Bhargavi Ramamurthy and Per Ronnås
Additional contact information
Bhargavi Ramamurthy: Department of Economics
Per Ronnås: Department of Economics, Postal: Stockholm School of Economics, Box 6501, 113 83 Stockholm, Sweden.

No 83, SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics

Abstract: There has been a revival of interest in small industries and their linkages with a nation's institutional arrangements, among both academicians and policy makers. Extending the definition of institutions to include formal and informal rules, this paper attempts to identify these linkages using the technique of transaction costs. Applying this to the economic environment of small firms in Taiwan and India it is found that transaction costs have been lower among Taiwanese small firms when compared to their Indian counterparts owing to certain institutional factors which have shaped its developmental history, the most important ones being the indirect intervention of the government, strong vertical linkages and a high level of human capital endowment. It is argued that the protectionist policy and other institutional factors in India perpetuated an institutional rigidity that worked to raise transaction costs for the small firm.

Keywords: Small industries; institutions; transaction costs; Taiwan; India (search for similar items in EconPapers)
JEL-codes: D8 E6 L1 O14 O53 O57 (search for similar items in EconPapers)
Pages: 84 pages
Date: 1995-11
References: Add references at CitEc
Citations:

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:hhs:hastef:0083

Access Statistics for this paper

More papers in SSE/EFI Working Paper Series in Economics and Finance from Stockholm School of Economics The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Helena Lundin ().