Property rights theory, transaction costs theory, and agency theory: An organizational economics approach to strategic management

Jongwook Kim, Joseph T. Mahoney

Research output: Contribution to journalArticlepeer-review

Abstract

Property rights theory has common antecedents with contractual theories of the firm such as transaction costs and agency theories, and is yet distinct from these theories. We illustrate fundamental theoretical principles derived from these three theories by analyzing the business case of oil field unitization. Theoretical principles and application of theory to oil field unitization are each summarized. From this, it is possible to see how property rights theory is well suited to explain business situations where inefficient economic outcomes persist. Additionally, property rights theory forges new theoretical connections with other branches of organizational economics, in particular, resource-based theory.

Original languageEnglish (US)
Pages (from-to)223-242
Number of pages20
JournalManagerial and Decision Economics
Volume26
Issue number4
DOIs
StatePublished - 2005

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management
  • Management Science and Operations Research
  • Management of Technology and Innovation

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