Explaining Firm Emergence: Specialization, Transaction Costs, and the Integration Process

Managerial and Decision Economics, Forthcoming

Mises Working Paper Series #0004/14

45 Pages Posted: 21 Dec 2013 Last revised: 19 May 2014

See all articles by Per L. Bylund

Per L. Bylund

School of Entrepreneurship; Ratio Institute; Mises Institute

Date Written: December 13, 2013


This article explains firm emergence and the role of firms in the market structure using the productive power of specialization. Based on productivity efficiencies through technological specialization, a model for firm emergence is drafted alongside Coasean transaction cost theory. I find that transaction costs cannot explain firm emergence but the entrepreneurial specialization perspective here adopted provides a promising approach to understanding the firm’s function to the entrepreneur and its internal organization and capabilities. It suggests a foundational framework for studying the creation of capabilities and the interplay between markets, firms, and entrepreneurs.

Keywords: firm emergence, resource heterogeneity, specialization, transaction costs

JEL Classification: D23, L22, L23, L26

Suggested Citation

Bylund, Per L. and Bylund, Per L., Explaining Firm Emergence: Specialization, Transaction Costs, and the Integration Process (December 13, 2013). Managerial and Decision Economics, Forthcoming, Mises Working Paper Series #0004/14 , Available at SSRN: https://ssrn.com/abstract=2370334

Per L. Bylund (Contact Author)

School of Entrepreneurship ( email )

Oklahoma State University
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HOME PAGE: http://business.okstate.edu/directory/694946.html

Ratio Institute ( email )

P.O. Box 3203
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Mises Institute ( email )

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HOME PAGE: http://mises.org/bylund

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