We use the theory of transaction cost economics to operationalise a model that can be used by firms to decide between operating through markets and vertical integration. We generate the model using FDI as our dependent variable and study the effects of six country level indicators that we selected as macro level proxy variables to measure transaction costs. We obtain significant results for four out of six independent variables but only one of the variables confirmed the initially predicted relationship using the theory.
Economics; Business Economics
Sonthalia, Atul, "Analysis on determinants of Firm’s Decision between Operation Through the Markets and Integration when Expanding into a New Country" (2020). Senior Independent Study Theses. Paper 9017.
Bachelor of Arts
Senior Independent Study Thesis
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