Transaction cost economics and open innovation:implications for theory and practice

Remneland-wikhamn, Björn and Knights, David (2012) Transaction cost economics and open innovation:implications for theory and practice. Creativity and Innovation Management, 21 (3). pp. 277-289. ISSN 0963-1690

Full text not available from this repository.


Transaction cost economics (TCE) has had a strong impact on theories of economic exchange but also on open innovation, even though the relationship is often implicit rather than explicit. In this paper, we highlight what we consider to be the problematic use of TCE in the context of open innovation, suggesting that it has a limited descriptive power and potentially does normative damage to open innovation practice. A case study of the Volvo Group will be drawn upon to illustrate these claims. The case questions the belief that hierarchical control eliminates transaction costs. Also, it suggests that an overemphasis on calculative reduction of transaction costs together with a focus on governance and rationality leave little space for an innovative climate, thus diverting attention away from the creative potential of transactions. Indeed the self-fulfilling prophecy character of subscribing to the assumptions of TCE may not merely limit but actually undermine innovation.

Item Type:
Journal Article
Journal or Publication Title:
Creativity and Innovation Management
Uncontrolled Keywords:
ID Code:
Deposited By:
Deposited On:
22 May 2013 08:44
Last Modified:
21 Nov 2022 23:50