Our goal in this paper is to explain the location of transactions (and contracts) in a larger system of production. We first characterize the system as a network of tasks and transfers. While transfers between agents are necessary and ubiquitous, the mundane transaction costos of standardizing,...

This chapter reviews the recent economic literature on transfer pricing. As a starting point, we take Hirshleifer's transfer pricing model and discuss the basic structure of the most widely used model extensions. We review transfer pricing models with asymmetric information, transfer pricing...

Our goal in this paper is to explain the location of transactions (and contracts) in a system of production. Systems of production are engineered systems, and where to place quot;transactionsquot; is one of the basic engineering problems that the designers of such systems face. We begin by...

We examine a sample of firms that adopt quot;target ownership plans,quot; under which managers are required to own a minimum amount of stock. We find that prior to plan adoption, such firms exhibit low managerial equity ownership and low stock price performance. Managerial equity ownership...

Two business units are said to have a financial boundary between them if their shares are separately traded. When business units are financially integrated, the risks associated with transactions among them will not affect the stock price of the integrated firm. This risk reduction can provide...

quot;Outsourcing success - it's all in Governancequot; reported Lauren Bielski in the ABA Banking Journal 2006 and consequently, governance represents the key concept when discussing outsourcing in practice.However, when analyzing the business process outsourcing practice of Swiss Retail Banks,...

Opportunistic behavior in contractual relations that require specific investments, commonly referred to as 'hold-up', has been employed in the literature as an argument to explain the existence of vertically integrated firms. However, many authors posit that this behavior can be avoided through...

Jensen amp; Meckling's agency theory represented the predominant analytical tool in scrutinizing the institutions of corporate governance during the last decades. While most of the literature focused on the corporate form, far less attention has been paid to the agency conflicts predetermining...

The paper suggests a partial solution to the disjunction between the institutional environment and the institutions of governance by considering the budget constraint. This approach is put in the perspective of the comparative analysis of economic organizations as discrete structural...

There is a tradition in modern business scholarship to see the corporation as a political actor. S.P. Waring argues that the modern business corporation is a polity, Herbert Kaufman views political theorists and management theorists as merely quot;different species of the same genus,quot; while...