In the property rights theory of the firm, control over assets (ownership) affords bargaining power in the case of re-negotiation, providing incentives for parties to make relationship specific investments. The models predict that property rights will be allocated so as to maximise surplus...

The dramatic increase in outsourcing has led to a burgeoning theoretical literature that tries to explain the associated organization of production. So far the literature has focused solely on analyzing the determinants of decisions by outsourcing firms, but has ignored the firms to which...