Localized Knowledge Transforms Firms' Governance, Boosting Productivity and Efficiency
In the article, researchers explore how knowledge affects business decisions. They combine ideas from two economic theories to better understand how companies operate. One theory focuses on the costs of doing business with others, while the other looks at a company's internal strengths. By blending these theories, the researchers show that using local knowledge can help firms succeed. They show that knowing how to handle transactions, coordinate tasks, and produce goods is crucial for business success. The study suggests that having the right knowledge within a company can make a big difference in how well it grows and thrives.