Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/169392
Authors: 
Eppinger, Peter S.
Kukharskyy, Bohdan
Year of Publication: 
2017
Series/Report no.: 
University of Tübingen Working Papers in Economics and Finance 100
Abstract: 
Contractual frictions are widely known to shape firm boundaries. But do better contracting institutions, which reduce these frictions, induce firms to be more or less deeply integrated? This paper provides a large-scale investigation of this question using a unique micro dataset of ownership shares across half a million firm pairs worldwide. We uncover strong evidence that better contracting institutions in subsidiaries' countries favor deeper integration, particularly in relationship-specific industries. We formally show that these findings can be explained by a generalized Property-Rights Theory of the firm featuring partial ownership, while they are at odds with the canonical Transaction-Cost Theory.
Subjects: 
firm boundaries
contracting institutions
multinational firms
property-rights theory
firmlevel analysis
JEL: 
F21
F23
D02
D23
L14
L23
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.