Explaining Firm Emergence: Specialization, Transaction Costs, and the Integration Process
Article first published online: 11 FEB 2014
Copyright © 2014 John Wiley & Sons, Ltd.
Managerial and Decision Economics
Volume 36, Issue 4, pages 221–238, June 2015
How to Cite
2015), Explaining Firm Emergence: Specialization, Transaction Costs, and the Integration Process. Manage. Decis. Econ., 36, 221–238. doi: 10.1002/mde.2661.(
- Issue published online: 29 APR 2015
- Article first published online: 11 FEB 2014
- Manuscript Accepted: 13 DEC 2013
- Manuscript Revised: 19 NOV 2013
- Manuscript Received: 24 SEP 2012
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.