Title: How important are transaction costs for service firm integration decisions? A meta-analysis

Authors: T. Russell Crook, Paul Louis Drnevich, Garry L. Adams, James G. Combs

Addresses: College of Business Administration, University of Tennessee, Knoxville, TN 37996, USA. ' Department of Management and Marketing, University of Alabama, 147 Alston Hall, Box 870225, Tuscaloosa, AL 35487, USA. ' College of Business, Auburn University, Auburn, AL 36849, USA. ' College of Business, Florida State University, Tallahassee, FL 32306, USA

Abstract: As the global economy becomes more service-based, the need to understand how service firms govern different activities has become increasingly important. Transaction Cost Theory (TCT) has long been a key perspective on the integration of different activities. TCT asserts that the costs surrounding exchanges, called transaction costs, direct managers| decisions about whether or not to integrate. We take a step towards understanding whether transaction costs play a role in service firms| integration decisions by aggregating results from 28 studies involving 31 samples via meta-analysis. The results reveal that TCT offers limited explanatory power for service firms| integration decisions, and that TCT requires augmentation with other theories in order to explain how service firms govern such activities.

Keywords: transaction costs; service firms; integration decisions; services.

DOI: 10.1504/IJSTM.2009.022521

International Journal of Services Technology and Management, 2009 Vol.11 No.2, pp.128 - 144

Published online: 14 Jan 2009 *

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