Empirical Research in Transaction Cost Economics: A Review and Assessment

THE JOURNAL OF LAW, ECONOMICS & ORGANIZATION, Volume 11:2, Fall 1995

Posted: 29 Aug 1998

See all articles by Howard A. Shelanski

Howard A. Shelanski

Georgetown University

Peter G. Klein

Baylor University - Hankamer School of Business; Norwegian School of Economics (NHH) - Department of Strategy and Management; Ludwig von Mises Institute

Abstract

This paper summarizes and assesses the growing body of empirical research in transaction cost economics (TCE). Originally an explanation for the scale and scope of the firm, TCE is now used to study a variety of economic relationships, ranging from vertical and lateral integration to transfer pricing, corporate finance, marketing, the organization of work, long-term commercial contracting, franchising, regulation, the multinational corporation, company towns, and many other contractual relationships. The main insights and predictions of TCE-in particular, the importance of governing transactions-are becoming increasingly accepted. The empirical support for these claims, however, is much less known. We believe the empirical literature, on the whole, is remarkably consistent with the predictions of TCE-more so than is typically the case in economics. After presenting an overview of the theory and a discussion of some theoretical and methodological preliminaries, we summarize the major findings and discuss their implications, particularly the potential applications to public policy. In an appendix we provide a more comprehensive list of articles, arranged by type of study, as a reference aid for researchers.

JEL Classification: G32

Suggested Citation

Shelanski, Howard A. and Klein, Peter G., Empirical Research in Transaction Cost Economics: A Review and Assessment. THE JOURNAL OF LAW, ECONOMICS & ORGANIZATION, Volume 11:2, Fall 1995, Available at SSRN: https://ssrn.com/abstract=6754

Howard A. Shelanski (Contact Author)

Georgetown University ( email )

Washington, DC 20057
United States

Peter G. Klein

Baylor University - Hankamer School of Business ( email )

Waco, TX 76798
United States
254-710-4903 (Phone)

Norwegian School of Economics (NHH) - Department of Strategy and Management ( email )

Breiviksveien 40
N-5045 Bergen
Norway

Ludwig von Mises Institute ( email )

Auburn, AL
United States

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