Marketing, Production Knowledge and Innovation: a Marshallian Perspective on Post-Coasian Theories of the Firm

Developments in post-Coasian theory of the firm suggest that the definition of knowledge implicit in standard transaction costs analysis is too narrow. This definition privileges the information which is employed in market exchanges at the expense of a vast and heterogeneous set of capabilities, knowledge and information employed in production. It is also pointed out in the same literature that when the focus shifts from the static comparison of intra- and extra-firm transactions to the dynamic process of innovation, the role of marketing is pivotal. Presented as an alternative to the Coase- Williamson approach, and to a large extent a spin-off of Alfred Chandler’s historical reconstruction of the emergence of North American giant corporations during the last century, this way of looking at industrial phenomena presents strong analogies with Alfred Marshall’s interpretation of the relationship between marketing and innovation during Britain’s nineteenth-century era of industrial leadership.