Transaction costs detailed: single‐industry studies and operationalization

This paper aims to present an in‐depth review on the latest state of empirical research in transaction cost economics (TCE), focusing on single‐industry studies. The intensely discussed subject of operationalization of transaction costs is critically assessed, and a concept of how to increase the quality of findings in empirical studies is presented.

The sample was obtained by a literature research and review in high‐class media and submitted to in‐depth quantitative and qualitative analysis such as content analysis.

The findings are in part unexpected and substantially contribute to research: applicability of TCE to a broad range of industries is found, the majority being large industries with important markets. Most studies support TCE statements, some suggesting theory extension by complementary aspects. Operationalization of transaction costs remains a field requiring further research.

First, this article is condensed and therefore limited to single‐industry studies within TCE, understanding “industry” as a specialized field of activity. The question of industry boundaries may be a base for future research. Second, the subject of operationalization of transaction costs still requires further research.

Decision makers can continue to use TCE for various applications such as strategic alliance, vertical integration, governance choice, make‐or‐buy or contract choice questions. A shortcoming in most articles reviewed is the presentation of the industry's characteristics. Authors need to consider them in order to increase the qualitative level of single‐industry studies.

This paper provides significant insight into the field of single‐industry TCE studies. As a result of penetrating research in high‐class media and in‐depth analysis, the paper provides highly structured and intensely examined statements on existing literature and related findings, which support TCE statements and will lead current disputes in the literature to a further stage.