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Cambridge Journal of Economics 28:505-525 (2004)
Cambridge Journal of Economics, Vol. 28, No. 4, © Cambridge Political Economy Society 2004; all rights reserved

Governance and competence: how can they be combined?

Bart Nooteboom*

Address for correspondence: Adelheidstraat 82, 2595EE Den Haag, The Netherlands; email: b.nooteboom{at}uvt.nl

Transaction cost economics faces serious problems concerning the way it deals, or fails to deal, with bounded rationality, the efficiency of outcomes, trust, innovation, learning and the nature of knowledge. The competence view yields an alternative perspective on the purpose and boundaries of the firm. However, the competence view cannot ignore issues of governance and, in spite of serious criticism, transaction cost economics yields some useful concepts to deal with them. This paper aims to contribute to the development of theory and empirical research that connects governance and competence perspectives.

Key Words: Governance • Competence • Learning • Transaction Costs • Organisation

JEL classifications: D21, D23, L14, L20

Manuscript received April 23, 2001; final version received August 5, 2002.


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