Semi-externalization, semi-internalization, misalignment costs, and CEOs' assessments of venture capitalists' support

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Date

2014

Authors

Khanin, D.
Turel, O.

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Journal ISSN

Volume Title

Publisher

Nazarbayev University

Abstract

Advancing transaction costs economics (TCE), we propose that hybrids (e.g., alliances) may be preferred to markets and hierarchies whenever the benefits of semi-externalization (partial adoption of the market mode of governance) combined with semi-internalization (partial adoption of the hierarchy mode of governance) less the misalignment costs that arise when these two conflicting modes of governance are combined exceed the benefits of full-blown externalization less the transaction costs and/or full-blown internalization less the administrative costs.

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Keywords

semi-externalization, semi-internalization, misalignment costs, venture capitalists

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