Title: ASSET FIXITY, ASSET SPECIFICITY AND REGIONAL ECONOMIC CHANGE: HYPOTHESIS AND IMPLICATIONS
Abstract:Abstract - That asset specificity and asset fixity are impediments to economic adjustment is well understood in the literatures of industrial organization and agricultural economics. In this paper, we...Abstract - That asset specificity and asset fixity are impediments to economic adjustment is well understood in the literatures of industrial organization and agricultural economics. In this paper, we show that spatial factors can plausibly be expected to be arguments in functions that define asset fixity and specificity and, hence, asset fixity may be systematically related to space. The implications with regard to differences across space in rates of adjustment to market signals suggest that the short run is longer in remote than in less remote places, which may prove useful in explaining the behavior of a spatial economic system during times of rapid technological change. I. Introduction The concept of asset fixity as an impediment to economic adjustment has been well understood by agricultural economists for more than a generation (Galbraith and Black, 1938; Johnson, 1958; Edwards, 1959) and there are some scattered references to the concept in economic development literature (Schultz, 1964; Robinson, 1965; di Tella, 1982; Ward 1993). The related concept of asset specificity as a factor affecting transaction cost was introduced by Williamson (1979; 1989) in reworking the theory of industrial organization. In this paper, we propose to explore the relationship between asset fixity and asset specificity and expand both concepts by introducing space into the analysis.Read More
Publication Year: 1999
Publication Date: 1999-01-01
Language: en
Type: preprint
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Cited By Count: 3
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