Understanding smart contracts as a new option in transaction cost economics

Among different concepts associated with the term blockchain, smart contracts have been a prominent one, especially popularized by the Ethereum platform. In this study, we unpack this concept within the framework of Transaction Cost Economics (TCE). This institutional economics theory emphasizes the role of distinctive (private and public) contract law regimes in shaping firm boundaries. We propose that widespread adoption of the smart contract concept creates a new option in public contracting, which may give rise to a smart-contract-augmented contract law regime. We discuss tradeoffs involved in the attractiveness of the smart contract concept for firms and the resulting potential for change in firm boundaries. Based on our new conceptualization, we discuss potential roles the three branches of government – judicial, executive, and legislative – in enabling and using this new contract law regime. We conclude the paper by pointing out limitations of the TCE perspective and suggesting future research directions

Defence science and innovation: an affordable strategic advantage

Overview: Australia’s neighbours in the Asia–Pacific are building high-quality science, technology, engineering and mathematics research capacities and infrastructure. As a consequence, Australia’s technological advantage in the defence domain is eroding. To recover that advantage, our policy should be to make the most of the knowledge, capability and capacity in Australia’s civilian science and innovation sector.  This special report analyses current and prospective Australian science, industry and defence science and innovation policy

Relational governance mechanisms and uncertainties in nonownership services

Entrepreneurs, managers and consumers are attracted by the promise of nonownership services in the sharing economy - to enjoy benefits of assets without bearing the costs and downsides of ownership. In many cases, reality of nonownership does not live-up to the promised value propositions, as present in the struggle of companies like Uber, BP or the entire Biopharma industry to exploit the potential of nonownership. In this article we unveil the underlying paradox of nonownership, which aims at a smart allocation of uncertainty upsides and downsides between providers and clients. We identify the potential of relational governance mechanisms to handle the uncertainty challenges apparent in nonownership. We present a pioneering case study of Rolls Royce airplane engines which unveils the contribution of relational governance in unfolding the economic benefits of nonownership

Strategic and operational outsourcing : decisions in the pharmaceutical industry

In this paper, we develop a framework of outsoucing research by providing a distictive view on the (recent) outsourcing literature

Externally-oriented Small and Medium Enterprises: Predicament and Possibilities

This paper addresses emerging issues concerning externally-oriented SMEs in India and the nature of important business risks faced by them during the period of global financial crisis. The unimpressive export performance of SMEs during the period of reforms is also a reflection of the limitations of the institutional support as also weak forms of production organization. The state needs to play a proactive role in contributing to enhancing SME competitiveness. Whereas financially well protected Indian SMEs are likely to be more competitive and efficient, a greater recognition of the potential of domestic market and provision of business-facilitating infrastructure holds the key for success of SMEs across board.Financial Crisis, SMEs, Exports, Business Risks

Relational contracts and collaboration in the supply chain: impact of expected future business volume on the make-or-buy decision

Relational contracts are key to supply chain collaboration. The literature has focused on the role of trust stemming from prior business with current suppliers. However, the role of expected future business volume on the make‐or‐buy decision has been relatively neglected. This paper contributes to the literature by examining how the level of expected future business volume affects the make‐or‐buy decision, that is, the choice to produce the product or service internally rather than to outsource it. Using regression analysis of secondary data from 12,272 construction projects and controlling for endogeneity, our results show that expected future business volume promotes outsourcing and that this impact is larger when the level of prior business with external suppliers is stronger and there is more specificity in the relationship. Our results are consistent with a game theoretic logic in which informally promising future interactions to sustain collaboration is more credible to external suppliers than to internal units because the former can use their assets elsewhere. Also, our results suggest that trust stemming from prior business reinforces the calculativeness logic that stems from the expectation of future business

Understanding Online Sourcing Decisions From The Service Clients\u27 Perspective: An Integrative Theoretical Framework

In this study we empirically examine a new global phenomenon - online sourcing – with a quantitative research method. Online sourcing is the newest development in outsourcing recently that uses Internet as the primary sourcing platform to approach the global sourcing of services. We believe that the emergence of online sourcing will fundamentally change the way work is done. Thus, gaining a deep understanding of the adoption of online sourcing becomes particularly important. Drawing upon theories of firms including transaction cost theory, we propose an integrative theoretical framework for the understanding of online sourcing decisions from the service clients’ perspective. The research model is examined with the data collected from an online sourcing platform. Our findings suggest the integrative theoretical framework rather than single perspective in understanding online sourcing decisions. Moreover, the study discloses how outsourcing decision attributes grounded in theories are interrelated within an integrative theoretical framework, as well as the relative importance of each theoretical perspective. Finally implications to theory, practice, business and society are discussed

Understanding Smart Contracts as a New Option in Transaction Cost Economics

Among different concepts associated with the term blockchain, smart contracts have been a prominent one, especially popularized by the Ethereum platform. In this study, we unpack this concept within the framework of Transaction Cost Economics (TCE). This institutional economics theory emphasizes the role of distinctive (private and public) contract law regimes in shaping firm boundaries. We propose that widespread adoption of the smart contract concept creates a new option in public contracting, which may give rise to a smart-contract-augmented contract law regime. We discuss tradeoffs involved in the attractiveness of the smart contract concept for firms and the resulting potential for change in firm boundaries. Based on our new conceptualization, we discuss potential roles the three branches of government – judicial, executive, and legislative – in enabling and using this new contract law regime. We conclude the paper by pointing out limitations of the TCE perspective and suggesting future research directions