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From Rent-Seeking Activities to Economic Activities: The Strategic Transformation of the Deregulated Firm

Author

Listed:
  • Bertrand Quélin

    (GREGH - Groupement de Recherche et d'Etudes en Gestion à HEC - HEC Paris - Ecole des Hautes Etudes Commerciales - CNRS - Centre National de la Recherche Scientifique)

  • Jean-Philippe Bonardi

Abstract

The political theory of regulation holds that deregulation of utilities obliges the former monopoly to abandon its rent-seeking activities to concentrate upon economic activities. However, the arguments presented by scholars to explain this strategic transformation are not entirely convincing. We argue in this paper that the role and the nature of the firm during the deregulation process have been underestimated in previous works. After describing the main steps of this process, we thus propose a dynamic explanation of the strategic transformation of the deregulated firm based on the concepts of firm capabilities, access to rents and transaction costs.

Suggested Citation

  • Bertrand Quélin & Jean-Philippe Bonardi, 1999. "From Rent-Seeking Activities to Economic Activities: The Strategic Transformation of the Deregulated Firm," Working Papers hal-00598228, HAL.
    • Handle: RePEc:hal:wpaper:hal-00598228
    as

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    References listed on IDEAS

    as
    1. Priest, George L, 1993. "The Origins of Utility Regulation and the "Theories of Regulation" Debate," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 289-323, April.
    2. Douglass C. North, 1990. "A Transaction Cost Theory of Politics," Journal of Theoretical Politics, , vol. 2(4), pages 355-367, October.
    3. Eliasson, G, 1991. "Deregulation, Innovative Entry and Structural Diversity as a," Journal of Evolutionary Economics, Springer, vol. 1(1), pages 49-63, January.
    4. Nicolai J. Foss, 1994. "Why transaction cost economics needs evolutionary economics," Revue d'Économie Industrielle, Programme National Persée, vol. 68(1), pages 7-26.
    5. Eggertsson,Thrainn, 1990. "Economic Behavior and Institutions," Cambridge Books, Cambridge University Press, number 9780521348911, October.
    6. Raul Fabella, 1989. "Monopoly deregulation in the presence of Tullock activities," Public Choice, Springer, vol. 62(3), pages 287-293, September.
    7. Noll, Roger G., 1989. "Economic perspectives on the politics of regulation," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 22, pages 1253-1287, Elsevier.
    8. Stanley M. Besen & Joseph Farrell, 1994. "Choosing How to Compete: Strategies and Tactics in Standardization," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 117-131, Spring.
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    More about this item

    Keywords

    rent-seeking; strategic renewal; capabilities;
    All these keywords.

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

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