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Digest Finance
 

Economic institutions of network organizations

Vol. 20, Iss. 3, SEPTEMBER 2015

PDF  Article PDF Version

Received: 18 March 2015

Accepted: 22 April 2015

Available online: 25 August 2015

Subject Heading: THEORY OF ECONOMIC ANALYSIS

JEL Classification: 

Pages: 33-47

Popov E.V. Institute of Economics, Ural Branch of Russian Academy of Sciences, Yekaterinburg, Russian Federation
epopov@mail.ru

Simonova V.L. Institute of Economics, Ural Branch of Russian Academy of Sciences, Yekaterinburg, Russian Federation
jet-Russia@yandex.ru

Importance Recently, the theory of network organizations has gained considerable development in the economy. However, the institutional analysis of network interactions has not yet received proper consideration in economic literature.
     Objectives The objective of the study is to systematize the economic institutions of network organizations with subsequent verification of working assumptions about effectiveness of these institutions.
     Methods The analysis of literature showed that major economic institutions of partnership relations of network organizations are institutions of formalized relationships, trust, knowledge sharing, organizational interaction, protection against opportunism, and the institution of control over partner actions. To test the impact of asset specificity on the institutional characteristics of network organizations, we conducted an empirical study.
     Results Empirical verification of network mechanisms of inter-firm interaction confirms the applicability of some conclusions of the theory of transaction costs to Russian conditions. As the specificity of the asset, which acts as an indicator of transaction costs grows, the importance of economic institutions of formalized relationships, trust, information exchange and organizational communication increases. However, we revealed the Russian peculiarities of the organization of inter-firm networking.
     Conclusions and Relevance Theoretical and practical analysis of transaction network organizations demonstrates the theoretical description of modern inter-firm interactions and allows determining specific manifestations of transactional relationships in modern conditions of the Russian industrial market functioning.

Keywords: economic institutions, network organizations, asset specificity, transaction costs

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