Internal markets and the theory of the firm

2001 ◽  
Vol 22 (4-5) ◽  
pp. 227-237 ◽  
Author(s):  
Jerry Ellig
Keyword(s):  
Theory Of The Firm ◽  
Internal Markets

scholarly journals The economic theory of the firm as a foundation for international business theory

2014 ◽  
Vol 22 (3) ◽  
pp. 205-226 ◽  
Author(s):  
Mark Casson
Keyword(s):  
Economic Theory ◽  
Multinational Firms ◽  
Multinational Enterprise ◽  
Theory Of The Firm ◽  
Division Of Labour ◽  
Content Type ◽  
Internal Markets ◽  
Management Capability ◽  
Geographical Dispersion ◽  
Barriers To Growth

Purpose – This paper aims to argue that management capability is a complement to ownership advantage. Ownership advantage determines the potential of the firm, and management capability governs the fulfilment of this potential through overcoming barriers to growth. The economic theory of the firm is central to the theory of the multinational enterprise (MNE). Design/methodology/approach – Multinationals play an important role in coordinating the international division of labour through internal markets. The paper reviews the economic principles that underlie this view. The analysis is applied to a variety of issues, including out-sourcing, geographical dispersion of production and regional specialisation in marketing. Findings – The economic theory of the firm is central to the theory of the MNE. Recent literature on multinationals, however, makes only limited reference to the economic theory of the firm. Optimal internalisation equates marginal benefits and costs. The benefits of internalisation stem mainly from the difficulties of licensing proprietary knowledge, reflecting the view that MNEs possess an “ownership” or “firm-specific” advantage. The costs of internalisation, it is argued, reflect managerial capability, and in particular the capability to manage a large firm. Originality/value – The paper demonstrates the value of the economic theory of the firm in analysing the strategy, structure and size of multinational firms. It restates classic economic principles and applies them to contemporary issues, including the performance and survival of multinational firms in current times.

Vertical Restrictions: Development of Theory, Antitrust Legislation and Enforcement

2010 ◽  
pp. 110-122 ◽  
Author(s):  
S. Avdasheva ◽  
N. Dzagurova
Keyword(s):  
Institutional Theory ◽  
Institutional Economics ◽  
Theory Of The Firm ◽  
New Institutional Economics ◽  
Hierarchical Organization ◽  
Vertical Restraints ◽  
New Institutional Theory ◽  
Antitrust Laws ◽  
Antitrust Legislation ◽  
Market Organization

The article examines the interpretation of vertical restraints in Chicago, post-Chicago and New Institutional Economics approaches, as well as the reflection of these approaches in the application of antitrust laws. The main difference between neoclassical and new institutional analysis of vertical restraints is that the former compares the results of their use with market organization outcomes, and assesses mainly horizontal effects, while the latter focuses on the analysis of vertical effects, comparing the results of vertical restraints application with hierarchical organization. Accordingly, the evaluation of vertical restraints impact on competition differs radically. The approach of the New Institutional Theory of the firm seems fruitful for Russian markets.

The Economic Theory of the Firm: A Generalization

2012 ◽  
pp. 41-66 ◽  
Author(s):  
M. Storchevoy
Keyword(s):  
Economic Theory ◽  
General Theory ◽  
Contract Theory ◽  
Theory Of The Firm ◽  
Material Structure ◽  
Structural Factors ◽  
Boundaries Of The Firm ◽  
Opportunistic Behaviour ◽  
New Variant

The paper deals with development of a general theory of the firm. It discusses the demand for such a theory, reviews existing approaches to its generalization, and offers a new variant of general theory of the firm based on the contract theory. The theory is based on minimization of opportunistic behaviour determined by the material structure of production (a classification of ten structural factors is offered). This framework is applied to the analysis of three boundaries problems (boundaries of the job, boundaries of the unit, boundaries of the firm) and five integration dilemmas (vertical, horizontal, functional, related, and conglomerate).

Theory of the firm, Supply Chain management, and relationship marketing

2014 ◽  
pp. 40-60
Author(s):  
M. Storchevoy
Keyword(s):  
Economic Theory ◽  
Supply Chain ◽  
Supply Chain Management ◽  
Relationship Marketing ◽  
Theory Of The Firm ◽  
Chain Management

The paper studies through the lens of the economic theory of the firm the development of two managerial disciplines: supply chain management and relationship marketing. The author demonstrates which ideas have been borrowed by these disciplines from the economic theory of the firm, and in what extent their implications may be useful for the latter.

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