Economics of Globalization: A Transaction Cost Perspective

Dit vak wordt in het Engels aangeboden. Omschrijvingen kunnen daardoor mogelijk alleen in het Engels worden weergegeven.

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Globalization is an important source of welfare, but at the same time
heavily contested in modern societies. This course elaborates on the
costs and benefits of globalization introducing modern non-mainstream
theories that at points challenge the traditional wisdom regarding the
benefits of globalization and helps to understand the prevailing
sentiments against globalization. We will heavily rely on insights from
transaction cost theory which challenges the neglect in traditional
neoclassical theory of transaction costs. The (oftentimes implicit)
reliance in mainstream trade theory on frictionless trade is surprising
for theories in which exchange is at the heart of the matter. This
course aims to familiarize you with the concept of transaction costs and
to show the relevance of transaction costs for understanding several of
the empirical phenomena that are impossible to understand without
relying on such costs.

Insights are particularly relevant to appreciate current discussions on
the impact of globalization on a small open economy such as the
Netherlands. Think, for example, about recent discussions on reshoring
and the impact of globalization on wage inequality and unemployment. The
course will focus on four main areas of research in which transaction
costs are dominant, viz. (i) international trade with a focus on the
multiple dimensions of transaction costs distinguishing between
transport costs, institutional costs and cultural costs of exchange,
(ii) foreign direct investments with a focus on outsourcing and the
organization of the firm in a globalizing world, (iii) industrial
organization with a focus on the determinants of the boundaries of the
firm, and (iv) networks with a focus on the role of social and regional
networks, and on standards as institutionalized settings that facilitate
exchange of goods, ideas, etc.


Six weekly interactive lectures of 3-4 hours in the early evening.


Individual paper and presentation and optional assignments.


An extensive reading list is made available at the start of the course.


Second and third year participants in the honours program.

Afwijkende intekenprocedure

SBE rules and dates apply for this SBE HP course. Registration via VUnet.

Aanbevolen voorkennis

Basic familiarity with the principles of economics and statistics.

Algemene informatie

Vakcode E_HP1_EGTC
Studiepunten 6 EC
Periode P4
Vakniveau 300
Onderwijstaal Engels
Faculteit School of Business and Economics
Vakcoördinator prof. dr. H.L.F. de Groot
Examinator prof. dr. H.L.F. de Groot
Docenten prof. dr. H.L.F. de Groot

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