On the Grouping of Tasks into Firms: Make-or-Buy with Interdependent Parts
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OntheGroupingofTasksintoFirms.pdf
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268.7 KB
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Author(s)
Novak, Sharon (Economist)
Wernerfelt, Birger
Date Issued
January 2012
Journal
Journal of Economics & Management Strategy
Publisher
Wiley-Blackwell Pubishers
Citation
Novak, Sharon (Economist), and Birger Wernerfelt. “On the Grouping of Tasks into Firms: Make-or-Buy with Interdependent Parts.” Journal of Economics & Management Strategy 21.1 (2012): 53–77. CrossRef. Web.
Version
Author's final manuscript
Abstract
We study the division of labor within production systems and look for the optimal grouping of tasks into firms. Using a unique dataset on the global automobile industry, we present evidence consistent with the prediction that pairs of tasks requiring more frequent mutual adaptation are more likely to be performed by the same firm. By taking account of interdependencies between tasks, our econometric approach generalizes standard make-or-buy analysis and yields improvements in predictive accuracy.
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1111/j.1530-9134.2011.00322.x
