Beyond Transaction Cost Economics: Towards an endogenous theory of Information Technology Outsourcing

Information technology (IT) enables businesses to integrate information systems across entities without altering the firms’ legal boundaries. New forms of inter-firm dependence and governance mechanisms may arise, due to the explicit investments made in technology and systems for collaboration purposes. There is an important distinction between general and customized investments in inter-organizational information systems (IOS), because the specificity level in IT exhibits certain characteristics that accentuate both the risk and value of inter-firm trade. Several research calls were made to validate governance theories on IOS. Based on a literature review, this paper provides a synthesis and integration of transaction cost economics (TCE) and IOS literature regarding governance forms. The paper discusses why the specificity level of IOS plays a central role in modern collaboration between firms, and how vertical electronic coordination (VEC) represents a mechanism for electronic governance forms and presents an agenda for future research.

Download Full-text

Empirical Evidence on How Information Technology Encourages the Creation of Strategic Networks

Inter-Organizational Information Systems in the Internet Age ◽

10.4018/978-1-59140-318-0.ch013 ◽

2005 ◽

pp. 328-360 ◽

Cited By ~ 1

Author(s):

Jose A. Medina-Garrido ◽

Sebastian Bruque-Camara ◽

Jose Ruiz-Navarro

Keyword(s):

Information Technology ◽

Empirical Evidence ◽

Transaction Cost ◽

Transaction Cost Economics ◽

Theoretical Perspective ◽

Theoretical Framework ◽

Resource Based View ◽

Strategic Networks ◽

The Creation

This chapter analyzes how information technology fosters and supports the creation of strategic networks. First, we shall establish an eclectic theoretical framework that can appropriately explain the reasons why firms form strategic networks. We base our analysis on the theories of transaction cost economics and the resource-based view. Second, we shall analyze, from this theoretical perspective, how information technology can affect the factors of value and cost that influence the formation of strategic networks. Finally, we shall empirically test if theory predictions actually occur in practice, by studying the role that information technology has played in the formation of a network by a Spanish firm.

Download Full-text

From transaction costs to transaction value: Overcoming the frictional paradigm

Voprosy Ekonomiki ◽

10.32609/0042-8736-2020-8-51-81 ◽

2020 ◽

pp. 51-81

Author(s):

D. P. Frolov

Keyword(s):

Transaction Costs ◽

Transaction Cost ◽

Path Dependence ◽

Transaction Cost Economics ◽

Cost Minimization ◽

Low Cost ◽

Coase Theorem ◽

Transactional Analysis ◽

Transaction Sector ◽

Transaction Value

The transaction cost economics has accumulated a mass of dogmatic concepts and assertions that have acquired high stability under the influence of path dependence. These include the dogma about transaction costs as frictions, the dogma about the unproductiveness of transactions as a generator of losses, “Stigler—Coase” theorem and the logic of transaction cost minimization, and also the dogma about the priority of institutions providing low-cost transactions. The listed dogmas underlie the prevailing tradition of transactional analysis the frictional paradigm — which, in turn, is the foundation of neo-institutional theory. Therefore, the community of new institutionalists implicitly blocks attempts of a serious revision of this dogmatics. The purpose of the article is to substantiate a post-institutional (alternative to the dominant neo-institutional discourse) value-oriented perspective for the development of transactional studies based on rethinking and combining forgotten theoretical alternatives. Those are Commons’s theory of transactions, Wallis—North’s theory of transaction sector, theory of transaction benefits (T. Sandler, N. Komesar, T. Eggertsson) and Zajac—Olsen’s theory of transaction value. The article provides arguments and examples in favor of broader explanatory possibilities of value-oriented transactional analysis.

Download Full-text