Friebel, Guido; Raith, Michael - Institute for the Study of Labor (IZA) - 2006
We develop a theory of firm scope in which integrating two firms into one facilitates the allocation of resources, but … leads to weaker incentives for effort, compared with nonintegration. Our theory makes minimal assumptions about the … integration or non-integration is optimal. Our theory thus provides a simple answer to Williamson's “selective …