Abstract:

Since 1980s some scholars have done some researches on the nature of the enterprise group in the frame of transaction cost founded by Ronald H. Coase.The frame of transaction cost is nothing but a static method, so it can be only used to analyze which commercial transactions should be organized by the internal market of an enterprise group, which should be organized by the external market of an enterprise and/or an enterprise group, and which should be organized by the internal market of an enterprise in a static state. It can not be used to analyze the nature of the enterprise group in a dynamic state.Accordingly, the conclusions drawn from the frame of transaction cost have their limitations. If the factors of monopoly, competition and specialization are introduced into the frame of transaction cost, we may have a better understanding of the nature of the enterprise group.

Key words: enterprise group, integration, transaction cost, specialization