• Table of Contents
    • Abstract
    • Keywords
    • Article
      • Firms’ boundaries and relationship-specific assets or investments
      • Firms’ boundaries and the contracting environment
      • Firms’ boundaries and the division of labour
      • Firms’ boundaries and economic outcomes
    • See Also
    • Bibliography
    • How to cite this article

firm boundaries (empirical studies)

Thomas N. Hubbard
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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Abstract

The empirical literature on the determinants of firms’ boundaries examines relationships between firms’ boundaries and asset specificity, especially how relationship-specific investments create ‘hold-up’ problems that increase the costs of competitive contracting; relationships between firms’ boundaries and the contracting environment, reflecting the role of incomplete contracting in the theoretical literature and the extent to which firms subcontract downstream stages rather than input procurement; and how firms’ boundaries vary with ‘job design’. This literature has established that asset specificity is empirically relevant for understanding integration decisions, and that relationships between subcontracting decisions, the contracting environment, and the division of labour are subtle.
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How to cite this article

Hubbard, Thomas N. "firm boundaries (empirical studies)." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 17 April 2014 <http://www.dictionaryofeconomics.com/article?id=pde2008_F000288> doi:10.1057/9780230226203.0575

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