Incomplete property rights drive firms to centralize control and ownership
This article examines how firms decide whether to make or buy goods, focusing on costs and rights. It suggests that not having complete permission to use property can lead to extra costs due to spillover effects. When a business doesn't fully own needed rights, it can face higher expenses using money to get assets. So, firms might keep things in-house to deal with both incomplete contracts and property rights. This way, the firm acts as a hub for incomplete rules and ownership.