Anne Yvrande-Billon
U. of Paris 1

Yvrande-Billon

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(Saturday, 1st January 2005)

Title : New Methodologies in TCE Empirical Research

The ‘empirical success story’ of TCE lies on cross-sectional studies which show that firms choose the contractual arrangements of their transactions according to transaction cost principles. In other words, these empirical studies investigate the degree to which organizational forms and contractual design are aligned to transaction features and indirectly the degree to which they minimize transaction costs. The results of these studies show strong support for TCE predictions as regard organizational and contractual choices.

However, as regard the performance impact of alternative governance structure choices, e.g. the choice of market versus hierarchies, or the choice of long-term contracting versus arm’s length arrangements, it is only recently that new types of tests have been developed to move beyond the TCE conventional empirical research, that is to say beyond the analysis of the determinants of organizational choices.

The objective of this workshop is to review the new methodologies in TCE empirical research, what we have called the “second generation” empirical studies in TCE.

Bibliographical references :

Nickerson, J.A., and B.S. Silverman 2003 “Why Firms Want to Organize Efficiently and What Keeps Them from Doing So: Evidence from The For-Hire Trucking Industry” Administrative Science Quarterly 48 (3): 433-65.

Sampson, R.C. 2004 “The Cost of Misaligned Governance in R&D Alliances” Journal of Law, Economics and Organization 20(2): 484-526.

Must read reference : Yvrande-Billon, A., and S. Saussier 2005 “Do Organization Choices Matter? Assessing the Importance of Governance through Performance Comparisons” in New Ideas in Contracting and Organizational Researches, H. James (ed.), Nova Science Publishers.