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

Bylund Per L. | Zendy

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

Author(s) -

Bylund Per L.

Publication year - 2015

Publication title -

managerial and decision economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.288

H-Index - 51

eISSN - 1099-1468

pISSN - 0143-6570

DOI - 10.1002/mde.2661

Subject(s) - transaction cost , coase theorem , industrial organization , theory of the firm , productivity , function (biology) , economics , perspective (graphical) , database transaction , process (computing) , vertical integration , market power , capital call , firm offer , microeconomics , business , computer science , profit (economics) , monopoly , individual capital , evolutionary biology , artificial intelligence , biology , financial capital , programming language , macroeconomics , operating system

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. Copyright © 2014 John Wiley & Sons, Ltd.

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