An empirical examination of transaction-and firm-level influences on the vertical boundaries of the firm

Michael J. Leiblein, Douglas Miller

Research output: Contribution to journalArticle

343 Citations (Scopus)

Abstract

A large literature has successfully employed transaction cost economic theory to describe how exchange conditions affect the optimal form of organization. However, this approach has historically not accounted for the influence of firm-specific attributes on the governance decision. This paper develops a model based on insights from transaction cost economics, the resource-based view, and real options theory to examine how transaction-level characteristics, firm-specific capabilities, and product-market scope influence the governance of production. Empirical evidence derived from analysis of 469 make-or-buy decisions involving 117 semiconductor firms indicates that decisions regarding the governance of production activities are strongly influenced by both transaction-and firm-level effects.

Original languageEnglish (US)
Pages (from-to)839-859
Number of pages21
JournalStrategic Management Journal
Volume24
Issue number9
DOIs
StatePublished - Sep 1 2003
Externally publishedYes

Fingerprint

Boundaries of the firm
Governance
Transaction cost economics
Empirical evidence
Level effect
Resource-based view
Firm-specific characteristics
Economic theory
Semiconductors
Product market
Make or buy decisions
Real options theory

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Strategy and Management

Cite this

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An empirical examination of transaction-and firm-level influences on the vertical boundaries of the firm. / Leiblein, Michael J.; Miller, Douglas.

In: Strategic Management Journal, Vol. 24, No. 9, 01.09.2003, p. 839-859.

Research output: Contribution to journalArticle

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