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1997•Journal of Institutional and Theoretical Economics-zeitschrift Fur Die Gesamte StaatswissenschaftRequires access

The transaction cost theory of the (multinational) firm : a note

James H. Love

Open publisher page 5 citations

Abstract

Ambiguities are identified in HALLWOOD's [1994] explanation of the existence of the multinational firm. Hallwood argues that internalization theory contains two critical implicit assumptions. The first of these is non-existent, and the second has been presented in a potentially misleading way. By appearing to draw a clear distinction between measurement costs and transaction costs, Hallwood obscures the important issue of information asymmetry and search costs in final product markets.

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What this paper is about

Ambiguities are identified in HALLWOOD's [1994] explanation of the existence of the multinational firm. Hallwood argues that internalization theory contains two critical implicit assumptions. The first of these is non-existent, and the second has been presented in a potentially misleading way. By appearing to draw a clear distinction between measurement costs and transaction costs, Hallwood obscures the important issue of information asymmetry and search costs in final product markets.

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OpenAlex reports 5 citations for this work. Citation counts describe recorded attention and do not establish research quality.

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Available abstract

Ambiguities are identified in HALLWOOD's [1994] explanation of the existence of the multinational firm. Hallwood argues that internalization theory contains two critical implicit assumptions. The first of these is non-existent, and the second has been presented in a potentially misleading way. By appearing to draw a clear distinction between measurement costs and transaction costs, Hallwood obscures the important issue of information asymmetry and search costs in final product markets.

Key concepts: Internalization theory, Transaction cost, Multinational corporation, Industrial organization, Information asymmetry, Microeconomics, Product (mathematics), Economics

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