Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86274
Authors: 
den Butter, Frank A.G.
Year of Publication: 
2007
Series/Report no.: 
Tinbergen Institute Discussion Paper 07-091/3
Abstract: 
Fragmentation of production into more and more complex supply chains is a prominent feature of globalisation. It implies that transaction costs as part of total costs of ownership carry a large weight in procurement decisions. An analysis of the various types of transaction costs is also essential in the “make or buy” and location decisions in global sourcing. A distinction can be made between “hard” and “soft” transaction costs. Soft transaction costs are difficult to quantify but become more important in strategic business decisions now that formal trade barriers gradually disappear and transport costs are reduced. Business strategies to keep transaction costs low in the long run can also, to a considerable extent, explain socially responsible business conduct from the perspective of rational economic behaviour.
Subjects: 
procurement
outsourcing
transaction costs
managing transactions
orchestrating the supply chain
JEL: 
F23
M14
M21
Document Type: 
Working Paper

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