Economising, Strategising and the Vertical Boundaries of the Firm

Dermot Leahy, Catia Montagna

Research output: Contribution to journalArticle

11 Downloads (Pure)

Abstract

We bridge the organisational economics and industrial economics literatures on the vertical boundaries of the firm by contextualising the transaction cost approach to the make-or-buy decision within an oligopolistic market structure. Firms invest in the quality of the intermediate resulting in the endogenous determination of the price of the intermediate and marginal production cost of the final good. We highlight new strategic incentives to outsource and/or vertically integrate and show how these incentives can result in asymmetric-mode-of-operations, investment and costs. We apply our model to a number of different international trading setups.
Original languageEnglish
Article number20150085
JournalB.E. Journal of Theoretical Economics
Volume17
Issue number1
Early online date17 Jun 2016
DOIs
Publication statusPublished - Jan 2017

Keywords

  • Oligopoly
  • Outsourcing
  • Vertical Integration
  • Trade Liberalisation

Fingerprint Dive into the research topics of 'Economising, Strategising and the Vertical Boundaries of the Firm'. Together they form a unique fingerprint.

  • Profiles

    No photo of Catia Montagna

    Catia Montagna

    Person: Academic

    Cite this