Vertical integration: applying an economic calculus to knowledge

What is it about?

The paper presents a framework suggesting that specialization leads to differences in costs and efficiency in using various forms of knowledge between adjacent stages of production. The differences in costs and efficiencies of the various forms of knowledge help determine boundaries between firms. Three forms of knowledge are used (tacit, codified, and encapsulated) and a number of dimensions are suggested as being useful for distinguishing between them.

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