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- Title
Span of control, transaction costs, and the structure of production chains.
- Authors
Kikuchi, Tomoo; Nishimura, Kazuo; Stachurski, John
- Abstract
This paper builds coordination costs, transaction costs, and other aspects of the theory of the firm into a production chain model with an infinite number of ex ante identical producers. The equilibrium determines prices, allocations of productive tasks across firms, firm sizes, and the number of active firms. These prices and allocations match several stylized facts on firm boundaries, vertical integration, and division of the value chain.
- Subjects
SPAN of control; TRANSACTION costs; VALUE chains; BUSINESS size; VERTICAL integration
- Publication
Theoretical Economics, 2018, Vol 13, Issue 2, p729
- ISSN
1555-7561
- Publication type
Article
- DOI
10.3982/TE2376