The Law of Transaction Volumes

By Eyoel Bulti Terfassa and Chandra Amaravadi.

Published by The Organization Collection

Format Price
Article: Print $US10.00
Article: Electronic $US5.00

The relationship between social development, technology, institutions and economic growth is complex and is often the subject of a branch of sociology known as socio-cultural evolution. According to this theory, all societies start as simple communities. The need to feed its members leads to organization and use of technologies. If favorable conditions are encountered, the community increases in size. The interaction between population growth and technology leads to a stage called intensification that results in resource scarcities. Ultimately it leads to the formation of institutions to manage the society and its technologies. Simple societies then evolve into more complex societies with greater political, economic and technological organizations. In this paper, we link transactions to these variables and empirically establish the law of transaction volumes. The law states that “the volume of transactions will increase with the stage of development of a society.” Even though social development is frequently taken for granted, we will first establish that there has been social progress, focusing on the U.S. between 1965-2005. Then we will show that the volume of transactions in a number of areas such as housing starts, automobile sales and credit cards has been increasing during the same period of time, thereby establishing the law.

Keywords: Transactions, Evolution of Society, Law of Transaction Volumes

International Journal of Knowledge, Culture and Change Management, Volume 10, Issue 1, pp.417-440. Article: Print (Spiral Bound). Article: Electronic (PDF File; 1.169MB).

Eyoel Bulti Terfassa

Graduate Assistant, Department of Information Systems and Decision Sciences, Western Illinois University, Macomb, IL, USA

Eyoel Terfassa has an undergraduate degree is in Economics from Addis Ababa University, Ethiopia. He has worked for six years for Shell Ethiopia as Senior Area Business Manager and currently pursuing an MBA in Decision Sciences at Western Illinois University. He is also a graduate assistant in the department of Information Systems and Decision Sciences.

Dr. Chandra Amaravadi

Professor, Department of Information Systems and Decision Sciences, Western Illinois University, Macomb, IL, USA

Dr. Chandra S. Amaravadi is the State Farm Professor of Information Systems at Western Illinois University and recipient of the £5,000 best paper prize from the National Computer Center, U.K., for predicting the World and Business Computing in 2051. He holds a Ph.D from the University of Arizona and an MBA from the University of Minnesota. He has served as a consultant with Wellspring Computer Services, in Minneapolis and with Cognizant Technologies in Chennai, India. He regularly does consulting for small businesses. His research and consulting interests include E-Commerce, Knowledge Management, Executive Support, Mobile Computing and Information Retrieval.

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