Contractual theories of vertical integration derive firm boundaries as an efficient response to market transaction costs. These theories predict a relationship between underlying features of transactions and observed integration decisions. There has been some progress in testing these...

The paper discusses the role of communication technologies in reducing the costs of using market exchange. It analyzes the comparative effect of new technologies on transactions which take place within and outside the firm using Coase's postulate of the size of the firm. Technologically...

In vertical integration literature, the two processes leading to vertical integration, namely, (1) self-expansion of the scope of activities based on internal capabilities and (2) internalization of activities with external capabilities have not been distinguished. However, using internal...