Research
 
Applying an Economic Calculus to Knowledge

KNOWLEDGE-BASED VERTICAL DE-INTEGRATION: THE NATURE OF KNOWLEDGE AND ECONOMIC FIRM BOUNDARY LOCATION

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Publication:

van den Berg H. (revised and resubmitted 2014). Knowledge-Based Vertical De-Integration: The Nature of Knowledge and Economic Firm Boundary Location. Managerial and Decision Economics a(b): xxx-yyy.

Abstract:

This paper extends the knowledge-based view of the firm by using relative measures of three fundamental classifications of knowledge as factors of production. It relates differences in relative quantities of these classifications of knowledge to the probability that a given stage of production is outsourced or de-integrated. The probability of de-integration is found to increase on increasing reliance on tacit knowledge and decreasing reliance on encapsulated knowledge. The research was motivated by the belief that it is the cost and value of knowledge as a factor of production that determines economic efficiency.