The Firm vs. the Market: Dehomogenizing the Transaction Cost Theories of Coase and Williamson

Strategic Management Review, Forthcoming

50 Pages Posted: 6 Feb 2019 Last revised: 11 Feb 2019

See all articles by Per L. Bylund

Per L. Bylund

School of Entrepreneurship; Ratio Institute; Ludwig von Mises Institute

Date Written: January 5, 2019

Abstract

It has become commonplace in management research to refer to “transaction cost theory,” a joint Coase-Williamson approach to economic organizing. This off-the-cuff usage overlooks their differences by treating Coase as a pre-Williamsonian. I argue that their theoretical frameworks are different, and that they use different theoretical assumptions leading to different views of transaction costs, markets, and the firm. These differences are wide enough that they should be considered two distinct theoretical approaches to the firm. I outline their differences and elaborate on the implications of reconsidering Coase’s distinct theory for management and strategy research.

Keywords: Transaction Costs, Transaction Cost Economics, Ronald Coase, Oliver Williamson, Theory of the Firm

JEL Classification: D23, L14, L22

Suggested Citation

Bylund, Per L., The Firm vs. the Market: Dehomogenizing the Transaction Cost Theories of Coase and Williamson (January 5, 2019). Strategic Management Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3326772

Per L. Bylund (Contact Author)

School of Entrepreneurship ( email )

Oklahoma State University
424 Business building
Stillwater, OK 74078
United States
4057444301 (Phone)

HOME PAGE: http://https://business.okstate.edu/directory/bylund-per-694946.html

Ratio Institute ( email )

P.O. Box 3203
SE-103 64 Stockholm
Sweden

Ludwig von Mises Institute ( email )

Auburn, AL
United States

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

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