Behavioral assumptions and theory development: the case of transaction cost economics

Abstract Based on the theory of resources, agents and transaction costs, this paper developed a comprehensive organizational economics framework for explaining and predicting the layout of management resources of multinational corporations. Our empirical findings indicate that the governance decision making of the multinational enterprise management service is not only comparative ability of administrators but also the economic cost of management of enterprises contracted to influence administrator's behavior It is also influenced by.

Reason for multinational companies to choose overseas representatives: to integrate their perspectives based on resources, proxies, transaction costs *

This paper developed a comprehensive organizational economics framework to explain the allocation of management resources by multinational companies based on resources, agents and trading cost theory in overseas business. From a resource-based perspective, companies can increase their economic income by matching positions with managers that can make a greater contribution. However, those who are best suited for foreign positions may also be those who generate large amounts of agents and transaction costs by controlling or influencing behavior. Given the basic framework of resource base -

Reason for multinational companies to choose overseas representatives: to integrate their perspectives based on resources, proxies, transaction costs *

Trading theory includes the structure, cost, and benefits of economic and political transactions. Transactions are subject to certain costs and risks. If the transaction is too high, transactions are not practical regardless of their usefulness. Costs can be categorized as information costs (if available, reliable and reachable counterparts and intermediaries, how to run them, how to verify the stages), technical costs, legal costs and finance, whether transactions are useful Whether or not it is useful. There is risk whenever cost is uncertain. Risk management increases transaction costs and in some cases these costs render it impractical.

Transaction cost theory: This theory refers to the expenses normally incurred when creating economic transactions in international markets. This includes all the costs incurred from the start of a particular transaction to the end of the logic. It can be called the sum of all the costs it takes to establish a new market in foreign markets. Transaction cost theory includes implicit and explicit costs. The costs are affected by customers and services or product providers, ie entering the company.