Transactional hazards, institutional change, and capabilities: integrating the theories of the firm

Brahm, F and Tarzijan, J (2014) Transactional hazards, institutional change, and capabilities: integrating the theories of the firm. Strategic Management Journal, 35 (2). pp. 224-245. ISSN 0143-2095

Abstract

Using a detailed dataset from the Chilean construction industry, we explore how the predictions of the transaction cost and capabilities theories interact to explain building contractors' decisions to ‘make or buy’ the specialty trade activities needed to complete a construction project. We show that the contractor's productive capabilities strongly mediate the relationship between transaction hazards that originate from either temporal specificity or an exogenous change in the subcontracting law and the vertical integration decision. The inclusion of differential capabilities and its interaction with transactional hazards infuse contractors' boundary choices with systematic patterns of heterogeneity and contribute to the integration of these theoretical perspectives. Our analysis corrects for the endogeneity of the capabilities variable and provides a detailed assessment of the marginal effects in logit models.

More Details

Item Type: Article
Subject Areas: Strategy and Entrepreneurship
Date Deposited: 30 Jan 2019 10:23
Subjects: Transaction processing systems
Last Modified: 02 Nov 2024 02:48
URI: https://lbsresearch.london.edu/id/eprint/1056
More

Export and Share


Download

Full text not available from this repository.

Statistics

Altmetrics
View details on Dimensions' website

Downloads from LBS Research Online

View details

Actions (login required)

Edit Item Edit Item