We develop a theory of a firm in an environment with incomplete contracts. The firm's headquarter decides on the … complexity, the organization, and the global scale of its production process. Specifically, it decides: i) on the mass of …

total factor productivity. We provide empirical evidence in line with the predictions of our theory …

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 …