Scale, scope and spin-off from firms Online publication date: Mon, 30-Dec-2013
by T.V.S. Ramamohan Rao
International Journal of Economics and Business Research (IJEBR), Vol. 5, No. 2, 2013
Abstract: A firm's decision to integrate a new and innovative product depends on the scale and scope of its operations. Market interaction, organisational capabilities, managerial priorities, distribution of gains among stakeholders, and financial arrangements determine the nature and extent of scale and scope that a firm experiences. Disagreements may arise with respect to any of these aspects due to information asymmetry. Utilising a general specification of the revenue function of the firm this study proposes a lexicographic ordering of the above sources of spin-off.
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