Economists' perceptions versus managers' decisions:an experiment in transaction cost analysis


Are the perceptions of professional economists on transaction costs consistent with make-or-buy decisions made within firms? The answer may have important implications for transaction cost research. Data on firms' outsourcing during the new product development process are taken from a largescale survey of UK, German and Irish manufacturing plants, and we test the consistency of these outsourcing decisions with the predictions derived from the transaction cost perceptions of a panel of economists. Little consistency is evident between actual outsourcing patterns and the predictions of the (Williamsonian) transactions cost model derived from the panel of economists. There is, however, evidence of a systematic pattern to the differences, suggesting that a competence or resource-based approach may be relevant to understanding firm outsourcing, and that firms are adopting a strategic approach to managing their external relationships. © Cambridge Political Economy Society 2005; all rights reserved.

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Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
Additional Information: © Cambridge Political Economy Society 2005; all rights reserved. This is a pre-copy-editing, author-produced PDF of an article accepted for publication in Cambridge journal of economics following peer review. The definitive publisher-authenticated version Love, J. H., & Roper, S. (2005). Economists' perceptions versus managers' decisions: an experiment in transaction cost analysis. Cambridge journal of economics, 29(1), 19-36 is available online at:
Uncontrolled Keywords: transaction costs,outsourcing,economists’ perceptions,experiment,Economics and Econometrics
Publication ISSN: 1464-3545
Last Modified: 27 Mar 2024 08:08
Date Deposited: 27 Oct 2009 11:40
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Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
http://cje.oxfo ... bstract/29/1/19 (Publisher URL)
PURE Output Type: Article
Published Date: 2005
Authors: Love, James H.
Roper, Stephen



Version: Accepted Version

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