An investigation of Oliver Williamson's analysis of the division of labour

Article OPEN
Robert McMaster ; Michael J. White (2013)
  • Publisher: Oxford University Press
  • Journal: Cambridge Journal Of Economics, volume 37, issue 6, pages 1,283-1,301
  • Related identifiers: doi: 10.1093/cje/bet030

In 2009 Oliver Williamson was jointly awarded the Nobel Prize in Economics for his analysis of economic governance. Williamson was central to the emergence of the transaction cost framework as an important aspect of social scientific analysis. Part of this approach makes important efficiency predictions and prescriptions regarding the division of labour within firms in contemporary capitalist economies. This discounts issues of power and privileges 'firm-specific human assets' as the key organisational driver. Indeed, Williamson's approach intentionally conflates the employment relation with exchanges for 'intermediate' goods. This article seeks to investigate Williamson's explanatory claims through a UK-based panel dataset using a dynamic logit modelling approach. The findings question Williamson's central argument. The results, instead, are more consistent with the idea of the industry-specificity of labour and highlight the importance of firm size. Copyright , Oxford University Press.
  • References (38)
    38 references, page 1 of 4

    Baker, G., Gibbs, M. and Holmstrom, B. 1994. The internal economics of the firm: evidence from personnel data, Quarterly Journal of Economics, vol. 109, 881-919

    Battu, H., McMaster, R. andWhite, M. J. 2002. An empirical investigation of OliverWilliamson's 'Organization of work', Applied Economics, vol. 34, 1657-69

    Bingley, P. and Westergaard-Nielsen, N. 2003. Returns to tenure, firm-specific human capital and worker heterogeneity, International Journal of Manpower, vol. 24, 774-88

    Bloom, N. and van Reenen, J. 2007. Measuring and explaining management practices across ifrms and countries, Quarterly Journal of Economics, vol. 122, 1351-408

    Carroll, G. R. and Teece, D. J. (eds.) 1999. Firms, Markets and Hierarchies: The Transaction Cost Perspective, Oxford, Oxford University Press

    Carter, R. and Hodgson, G. M. 2006.The impact of empirical tests of transaction cost economics on the debate on the nature of the firm, Strategic Management Journal, vol. 27, 461-76

    Cavanagh, J. K., and Garen, J. 1997. Asset specificity, unionisation and the firm's use of debt, Managerial and Decision Economics, vol. 18, 255-69

    Cooke, F.L., Shen, J. and McBride, A. 2005. Outsourcing HR as a competitive strategy? A literature review and an assessment of implications, Human Resource Management, vol. 44, 413-32

    David, R. J. and Han, S.-K. 2004. A systematic assessment of the empirical support for transaction cost economics, Strategic Management Journal, vol. 25, 39-58

    Dow, G. K. 1987. The function of authority in transaction cost economics, Journal of Economic Behavior and Organization, vol. 8, 13-38

  • Metrics
    No metrics available
Share - Bookmark