Governance Mechanisms for Outsourcing Contracts or Why You Should Let the Air Out of Your Tires
p>Transaction cost economics (TCE) has emerged as a common framework for understanding the choice of governance mode in economic activities. TCE suggests that in response to exchange hazards, firms either craft complex contracts or may choose to vertically integrate when such contracts are too costly to craft and enforce. As exchange hazards rise, so must contractual safeguards, if contracting is...
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