More on Property Rights and Strategic Management
7 March 2008 at 9:38 am Nicolai Foss Leave a comment
| Nicolai Foss |
The economics of property rights in the tradition of Ronald Coase, Armen Alchian, Harold Demsetz, Steven Cheung, Winston Bush, Eirik Furubotn, Yoram Barzel, John Umbeck, Dean Lueck and Doug Allen is a very minor voice in the conversation of strategic management scholars. Although the EPR is basically generalized micro-economics (mostly done verbally), it does employ terminology and develops insights that lie outside the domain of economics knowledge of most strategy scholars.
However, a few papers have appeared in recent years that try to infuse strategic management with property rights insights (here, here and here). My conjecture is that the EPR remains under-mined with respect to useful insights for strategic management. A novel application of the EPR is competitive strategy — which is developed in a recent paper of mine (written with Kirsten Foss). As we intend to submit the paper to one of those journals that is pretty insistent on not having the paper or its title appearing on the internet, I here only reproduce the abstract:
The economics of property rights has recently become an important voice in the conversation of strategic management scholars. We argue that this approach has the potential to inform the foundations of competitive strategy research by conceptualizing competitive strategy as an attempt to delineate, capture or protect property rights to rent streams, and by pointing to the importance of value dissipation, expectations, and contracting for these processes. Specifically, firms’ possibilities of strategic maneuvering in an industry are constrained by the structure of transaction costs in that industry. An overarching implication is that the “economizing” branch of strategy, which emphasizes transaction costs, property rights, and contracting, has important, hitherto unnoticed implications for the “strategizing” branch which is founded on notions of market power.
Please, mail me at njf.smg@cbs.dk if you wish to receive a copy.
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