A Review on Influences on Make-or-Buy Decision by Transaction Cost Approach

摘要

As Transaction Costs Economics (TCE),partly of what has been termed the "New Institutional Economics",is now taken as one of the main approaches to the research on public administration,this paper aims to make clear that to what extent the empirical literature on the make-or-buy decision support the transaction cost approach. Firstly,this paper examines deferent illustrations on the transaction cost by different economists. Then it outlines the determinants of transaction costs,indicating that the basic three dimensions for describing transaction lies in frequency,investment idiosyncrasy,and uncertainty. Furthermore,drawing on existing literature,this paper puts forth the basic the framework in TCE,which is how to select organizational form or governance structure,is dependent on the best way to trade off between transaction costs and production costs.This paper summarizes that large body of literature has successfully applied transaction cost approach from TCE to illustrate how exchanging conditions affect the optimal form of organization. Then it attaches special attention on three broad approaches,which have had the most influence in the study of make-or-buy decision,and finds transaction cost economics take center stage in these approaches discussed in this article. Finally,it comes to the conclusion that existing research has largely based on insights put forward in TCE. Though there have been some challenges to the TCE framework,the evidence on the transactional determinants of make-or-buy decision seems quite striking and forcefully support the transaction cost approach in make-or-buy decision.