Portal de Periódicos da CAPES

Transaction Cost Theory: Origin and Development

2018; Volume: 13; Issue: 4 Linguagem: Inglês

10.18288/1994-5124-2018-4-05

2411-2658

Анна Панова,

Financial Reporting and Valuation Research

The questions of why similar transactions can be organised in completely different ways and why some of these transactions do not happen despite their apparent utility are very interesting. Modern economists explain this phenomenon from the point of view of transaction costs and their minimization. The transaction costs theory has come a long way from its inception in Coase’s work to its maturing in Williamson’s work and to its further development in the works of various contemporary scientists. Having started as a marginal idea, it became a successful empirically testable theory that can be used to analyse numerous economic industries ranging from the market for football players to factory process management in the aerospace industry. In this article, we analyse contemporary theoretical and empirical research papers to unveil the development of this theory. We show first how the notion of transaction cost emerged. Its appearance was prompted by the understanding among several scientists that there is a mismatch between theoretical conclusions and the real-life situation. An understanding came that all transactions lead to additional costs that are not directly related to production costs. Thus, an attempt was made to explain these additional costs. We show how the interaction with classical economics influenced the development of the theory, which concepts were abandoned in the struggle to enter the mainstream, and which ideas survived and became indispensable. We describe the opportunities for studying economic activity provided by this theory.