IDEAS home Printed from https://ideas.repec.org/a/eee/streco/v37y2016icp43-51.html
   My bibliography  Save this article

Finance-technology complementarities: An organizational equilibria approach

Author

Listed:
  • Nicita, Antonio
  • Pagano, Ugo

Abstract

Unlike many pre-crisis contributions, Oliver Williamson emphasized how different investment projects involve different forms of governance. According to him, their specificity contents define and separate the appropriate conditions for debt and equity governances. Our paper extends his contribution by arguing that, while the degree of specificity of the technology influences the choice of the governance, also the reverse is true: equity and debt governances involve different degrees of specificity. Thus, we have to deal with finance-technology complementarities, which can generate multiple organizational equilibria. Their possible inefficiency provides an argument for regulating the limits of each form of governance and for understanding the variety of arrangements existing in real life economies.

Suggested Citation

  • Nicita, Antonio & Pagano, Ugo, 2016. "Finance-technology complementarities: An organizational equilibria approach," Structural Change and Economic Dynamics, Elsevier, vol. 37(C), pages 43-51.
    • Handle: RePEc:eee:streco:v:37:y:2016:i:c:p:43-51
    DOI: 10.1016/j.strueco.2015.11.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0954349X15000636
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.strueco.2015.11.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Belloc, Marianna & Pagano, Ugo, 2009. "Co-evolution of politics and corporate governance," International Review of Law and Economics, Elsevier, vol. 29(2), pages 106-114, June.
    2. repec:bla:jfinan:v:43:y:1988:i:3:p:567-91 is not listed on IDEAS
    3. Shleifer, Andrei & Vishny, Robert W, 1992. "Liquidation Values and Debt Capacity: A Market Equilibrium Approach," Journal of Finance, American Finance Association, vol. 47(4), pages 1343-1366, September.
    4. Bruno Amable & Ekkehard Ernst & Stefano Palombarini, 2005. "How do financial markets affect industrial relations: an institutional complementarity approach," Post-Print halshs-00310484, HAL.
    5. Ugo Pagano, 2013. "Technical assets and property rights," Chapters, in: Anna Grandori (ed.), Handbook of Economic Organization, chapter 18, Edward Elgar Publishing.
    6. Aoki, Masahiko, 2010. "Corporations in Evolving Diversity: Cognition, Governance, and Institutions," OUP Catalogue, Oxford University Press, number 9780199218530.
    7. Ugo Pagano, 2012. "No institution is a free lunch: a reconstruction of Ronald Coase," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 59(2), pages 189-200, July.
    8. Masahiko Aoki, 2013. "The Contingent Governance Of Teams: Analysis Of Institutional Complementarity," Chapters, in: Comparative Institutional Analysis, chapter 14, pages 230-249, Edward Elgar Publishing.
    9. Amable, Bruno, 2003. "The Diversity of Modern Capitalism," OUP Catalogue, Oxford University Press, number 9780199261147.
    10. Philippe Aghion & Patrick Bolton, 1992. "An Incomplete Contracts Approach to Financial Contracting," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(3), pages 473-494.
    11. Ugo Pagano & Maria Rossi, 2004. "Incomplete Contracts, Intellectual Property and Institutional Complementarities," European Journal of Law and Economics, Springer, vol. 18(1), pages 55-76, July.
    12. Landini, Fabio, 2012. "Technology, property rights and organizational diversity in the software industry," Structural Change and Economic Dynamics, Elsevier, vol. 23(2), pages 137-150.
    13. Bowles,Samuel & Gintis,Herbert & Gustafsson,Bo (ed.), 1993. "Markets and Democracy," Cambridge Books, Cambridge University Press, number 9780521432238, September.
    14. Oliver Hart & John Moore, 1994. "A Theory of Debt Based on the Inalienability of Human Capital," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(4), pages 841-879.
    15. Ugo Pagano, 2014. "The crisis of intellectual monopoly capitalism," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 38(6), pages 1409-1429.
    16. Pagano, Ugo & Rowthorn, Robert, 1994. "Ownership, technology and institutional stability," Structural Change and Economic Dynamics, Elsevier, vol. 5(2), pages 221-242, December.
    17. Filippo Belloc & Ugo Pagano, 2012. "Knowledge Enclosures, Forced Specializations and Investment Crisis," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 9(3), pages 445-483, December.
    18. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    19. Francesca Gagliardi, 2009. "Financial development and the growth of cooperative firms," Small Business Economics, Springer, vol. 32(2), pages 231-231, February.
    20. Hart, Oliver & Moore, John, 1995. "Debt and Seniority: An Analysis of the Role of Hard Claims in Constraining Management," American Economic Review, American Economic Association, vol. 85(3), pages 567-585, June.
    21. Pagano, Ugo, 2011. "Interlocking complementarities and institutional change," Journal of Institutional Economics, Cambridge University Press, vol. 7(3), pages 373-392, September.
    22. Masahiko Aoki, 2001. "Toward a Comparative Institutional Analysis," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011875, April.
    23. Erkan Gurpinar, 2013. "Institutional Complementarities and Property Rights-Technology Equilibria under Knowledge Intensive Technology," Department of Economics University of Siena 673, Department of Economics, University of Siena.
    24. Marianna Belloc & Ugo Pagano, 2008. "Politics-Business Interaction Paths," Working Papers in Public Economics 109, Department of Economics and Law, Sapienza University of Roma.
    25. Milgrom, Paul & Roberts, John, 1990. "Rationalizability, Learning, and Equilibrium in Games with Strategic Complementarities," Econometrica, Econometric Society, vol. 58(6), pages 1255-1277, November.
    26. Svaleryd, Helena & Vlachos, Jonas, 2005. "Financial markets, the pattern of industrial specialization and comparative advantage: Evidence from OECD countries," European Economic Review, Elsevier, vol. 49(1), pages 113-144, January.
    27. Francesca Gagliardi, 2009. "Financial development and the growth of cooperative firms," Small Business Economics, Springer, vol. 32(4), pages 439-464, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Luca Cattani & Stefano Dughera & Fabio Landini, 2023. "Interlocking complementarities between job design and labour contracts," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(2), pages 501-528, July.
    2. Ugo Pagano, 2016. "Knowledge as a Global Common and the Crisis of the Learning Economy," Department of Economics University of Siena 743, Department of Economics, University of Siena.
    3. Yao, Meifang & Di, He & Zheng, Xianrong & Xu, Xiaobo, 2018. "Impact of payment technology innovations on the traditional financial industry: A focus on China," Technological Forecasting and Social Change, Elsevier, vol. 135(C), pages 199-207.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ugo Pagano, 2013. "Technical assets and property rights," Chapters, in: Anna Grandori (ed.), Handbook of Economic Organization, chapter 18, Edward Elgar Publishing.
    2. Landini, Fabio, 2013. "Institutional change and information production," Journal of Institutional Economics, Cambridge University Press, vol. 9(3), pages 257-284, September.
    3. Fabio Landini & Ugo Pagano, 2013. "Synergy, Conflict and Institutional Complementarities," Department of Economics University of Siena 686, Department of Economics, University of Siena.
    4. Andrei Shleifer & Robert Vishny, 2011. "Fire Sales in Finance and Macroeconomics," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 29-48, Winter.
    5. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    6. Buchen, Clemens, 2010. "Emerging economic systems in Central and Eastern Europe – a qualitative and quantitative assessment," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 37141, September.
    7. Efraim Benmelech & Nittai K. Bergman, 2008. "Liquidation Values and the Credibility of Financial Contract Renegotiation: Evidence from U.S. Airlines," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(4), pages 1635-1677.
    8. Committee, Nobel Prize, 2016. "Oliver Hart and Bengt Holmström: Contract Theory," Nobel Prize in Economics documents 2016-1, Nobel Prize Committee.
    9. Eduard Marinov, 2016. "The 2016 Nobel Prize in Economics," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 97-149.
    10. Landini, Fabio, 2012. "Technology, property rights and organizational diversity in the software industry," Structural Change and Economic Dynamics, Elsevier, vol. 23(2), pages 137-150.
    11. Ugo Pagano, 2019. "Proprietà e controllo delle grandi imprese: un’interpretazione del resistibile declino italiano," Department of Economics University of Siena 798, Department of Economics, University of Siena.
    12. Belloc, Filippo & Burdin, Gabriel & Cattani, Luca & Ellis, William & Landini, Fabio, 2022. "Coevolution of job automation risk and workplace governance," Research Policy, Elsevier, vol. 51(3).
    13. Ugo Pagano, 2013. "Love, war and cultures: an institutional approach to human evolution," Journal of Bioeconomics, Springer, vol. 15(1), pages 41-66, April.
    14. Schmidt, Klaus, 2017. "The 2016 Nobel Memorial Prize in Contract Theory," Rationality and Competition Discussion Paper Series 19, CRC TRR 190 Rationality and Competition.
    15. Oliver Hart, 2001. "Financial Contracting," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1079-1100, December.
    16. Manova, Kalina, 2008. "Credit constraints, equity market liberalizations and international trade," Journal of International Economics, Elsevier, vol. 76(1), pages 33-47, September.
    17. Huang, Guan-Ying & Huang, Henry Hongren & Lee, Chun I, 2020. "Taming the dark side of asset liquidity: The role of short-term debt," International Review of Economics & Finance, Elsevier, vol. 69(C), pages 539-562.
    18. Ugo Pagano & Maria Rossi, 2004. "Incomplete Contracts, Intellectual Property and Institutional Complementarities," European Journal of Law and Economics, Springer, vol. 18(1), pages 55-76, July.
    19. Ugo Pagano & Maria Alessandra Rossi, 2016. "The knowledge economy, the crash and the depression," Department of Economics University of Siena 741, Department of Economics, University of Siena.
    20. Benmelech, Efraim & Bergman, Nittai K., 2009. "Collateral pricing," Journal of Financial Economics, Elsevier, vol. 91(3), pages 339-360, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:streco:v:37:y:2016:i:c:p:43-51. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/525148 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.