The changing boundaries of the firm: empirical evidence from the aircraft engine industry

Two research traditions have analysed the boundaries of the firm. The first tradition is the theoretical and empirical literature on the theory of the firm. The competing theoretical paradigms provide different and diverging interpretations of firms’ boundaries. In the last decade there has been a surge of interest in the internal resources of the firm. Drawing on the seminal work of Penrose (1959), the resource-based view of the firm has emerged as an alternative paradigm for theoretical interpretations of the business organisation. In contrast to the contractual view that maintains that a firm can be conceived as a nexus of contracts, the resourcebased view conceives a firm as an organised bundle of resources.