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TRANSACTION COSTS AND THE WAYS TO OPTIMIZE THEM

D. Sizova, T. Sizova, E. Adulova, K. Kalinkina

Abstract

Modern institutional theory demonstrates astute attitude to studying transactional costs. The key explanation of transactional costs will include the costs, which the economic entity will bear while complying with the conditions of economic exchange. This is one of the guiding reasons why institutional theory of economics is often referred to as the economic theory of transactional costs. The real volume of transactional costs in the Global economy is getting increasingly high. Economic entities are facing the necessities to process costs, which are accrued above the purchase and sale or exchange transaction. Thus, the evident necessity to structure categories of costs occurring and to come up with the new methods of scrutinizing the existing approaches, is evolving. Scientific attempts to study the nature and the reason of transactional costs in the economy have come to a spectacular level. This article is mainly dedicated to complex observation of existing approaches of examining and calculation of transactional costs. While discussing transactional costs in the paper the authors are inclined to consider the consequence of limited rationality of the economic entity, the complexity of the economic environment and the coordination system in which economic transaction occurs. In this perspective, the authors will demonstrate that excessively high transactional costs have substantial economic influence. The authors will also provide the rationale for government and social institutions to decrease abovementioned costs with the exemplified informal norms and formal rules. The aim of the provided paper is to organize cabinet research in the field of transaction costs and their influence on the environment and economic activity of the business entity. The object of the research is the diversified typology of transaction costs. As the subject of the research the authors have chosen to study the essence and the reasons for transactional costs existence. According to the stated aim, the authors, while proceeding with the course of the paper, will be solving the following tasks: to consider the term and the essence of transaction costs, to provide common classifications of them, to demonstrate structural differentiation of transaction costs, to identify the ways to decrease them. The methodological and theoretical background of the paper includes national and international published research papers and methodological cases in the field of institutional economics and transactional costs. The methodology of the research is based on using classical and innovative approaches: systematic study, analysis and synthesis, dialectical logic, induction and deduction, comparison and consolidation. The use of the mentioned approached allows the authors to present the results in the most thorough, integral and reliable way. The provided results indicate the importance of transactional costs in the core economic activity of business entities.

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DOI resolver: doi.org/10.5593/sgemsocial2018/1.4/S04.117

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