According to Ronald Coase (The Nature of the Firm, 1937) firms are created because this reduces transaction costs compared to market transactions. Transactions are internalised because of the complexity involved in specifying them in contracts. It would seem that internalising a transaction involves internal processes and capacities which will likely be specific to the firm to some degree. Would these be considered a form of organisational capital?



Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.