How Relevant is Transaction Cost Economics to Inter-Firm Relationships in the Music Industry?

Authors: Gander J.¹; Rieple A.²

Source: Journal of Cultural Economics, Volume 28, Number 1, February 2004 , pp. 57-79(23)

Publisher: Springer

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Abstract:

This paper applies the transaction cost framework to the organisation of product sourcing and development (PS&D) activities within the popular music industry. Two firm types characterise the industry and this particular set of activities; large multinational firms (`majors') and smaller regionally bound companies (`independents'). We find that the Transaction Cost Economies framework of Oliver Williamson (1985, 1999) provides only a partial explanation for the observed hybrid organisational structures established by the two firm types. A more sensitive model can be achieved by including a number of moderating variables drawn from the socially constructed and situationally dependent idiosyncrasies of the assets involved in the PS&D activities under consideration.

Keywords: alliances; popular music industry; transaction cost economics

Document Type: Research article

DOI: http://dx.doi.org/10.1023/B:JCEC.0000009958.80454.f6

Affiliations: 1: University of East London, East London Business School, Barking campus, Longbridge Road, Dagenham, RM8 2AS Essex, U.K. 2: University of Westminster, Harrow Business School, Watford Road, Northwick Park, HA1 3TP Harrow, U.K.

Publication date: 2004-02-01