Outsourcing, Modularity and the Theory of the Firm

43 Pages Posted: 14 Aug 2009 Last revised: 25 Sep 2009

See all articles by Margaret M. Blair

Margaret M. Blair

Vanderbilt University - Law School

Erin A. O'Hara O'Connor

Florida State University - College of Law; Gruter Institute for Law and Behavioral Research

Date Written: August 3, 2009

Abstract

In recent years the practice of 'outsourcing' and 'offshoring' of production and services by firms in a wide range of industries has become quite common. This represents a change in the organization of production in many firms, from vertical integration to what has been called 'vertical specialization.' As such, it challenges theorists in management, economics, and the law to rethink some of the accepted explanations that theorists have offered about why individual firms exist at all. Why is it that some productive activity is organized through arms-length exchanges in markets, while some is governed by formal contracts, and other activities tend to be carried out within the boundaries of individual firms?

Suggested Citation

Blair, Margaret M. and O'Hara O'Connor, Erin A., Outsourcing, Modularity and the Theory of the Firm (August 3, 2009). Vanderbilt Law and Economics Research Paper No. 09-19. Available at SSRN: https://ssrn.com/abstract=1443357 or http://dx.doi.org/10.2139/ssrn.1443357

Margaret M. Blair (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States
615-322-6087 (Phone)

Erin A. O'Hara O'Connor

Florida State University - College of Law ( email )

425 W. Jefferson Street
Tallahassee, FL 32306
United States

HOME PAGE: http://www.law.fsu.edu/our-faculty/deans/ohara-oconnor

Gruter Institute for Law and Behavioral Research

158 Goya Road
Portola Valley, CA 94028
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
321
Abstract Views
1,411
rank
94,272
PlumX Metrics