In the paper the trade-offs among endogenous transaction costs caused by two-sided moral hazard, exogenous monitoring cost, and economies of specialization are specified in a Grossman, Hart and Moore (GHM) model to absorb Maskin and Tirole’s recent critique and Holmstrom and Milgrom’s...

Because Toyota symbolizes the miraculous success of the Japanese automobile industry as a whole, scholars have thoroughly documented the nature of Toyota’s business strategy and its keiretsu.1 In contrast, literature exploring the nature of Nissan’s keiretsu and its business strategy was...

Outsourcing is one of the organizational practices that have increased in popularity over the past decade, even in the public sector. However, management control literature gives a little attention to this new form of organization. Two paradigms dominate the inter-organizational management...

To explain organizational decisions in multistage production processes we assume a production process with one producer and two suppliers of which one is the firm's direct supplier and the other one is the supplier of the supplier. The firm decides only on the organizational form of her direct...

Local and regional policy makers are acquiring an increasingly active role in affecting firms' specialization decisions that in turn influence firms' vertical organization. We analyse the relation between vertical integration incentives and trade liberalization in the presence of glocal...

The industrial organization of developing countries is characterized by the pervasive use of subcontracting arrangements among small, financially constrained firms. This paper asks whether vertical integration relaxes those financial constraints. It shows that vertical integration trades off the...

The theory of the firm suggests that firms can respond to poor contract enforcement by vertically integrating their production process. The purpose of this paper is to examine whether firms' integration opportunities affect the way contract enforcement institutions determine international trade...

The theory of the firm suggests that firms can respond to poor contract enforcement by vertically integrating their production process. The purpose of this paper is to examine whether firms' integration opportunities affect the way institutions determine international trade patterns. We find...

The industrial organization of developing countries is characterized by the pervasive use of subcontracting arrangements among small, financially constrained firms. This paper asks whether vertical integration relaxes those financial constraints. It shows that vertical integration trades off the...

The theory of the firm suggests that firms can respond to poor contract enforcement by vertically integrating their production process. The purpose of this paper is to examine whether firms' integration opportunities affect the way institutions determine international trade patterns. We find...