An Empirical Test of the Internal Market/external Market Model

The Internal Market /External Market model argues that entities in the form of households, businesses or other social units can create, consume and/or use goods and services internally, thus avoiding the external market. This model suggests that seven key constructions (expertise capacity, resource capacity, time capacity, economic rewards, psychic rewards, trust and control) are relevant to an internal / external market choice decision. The 1MZEM model was tested at the consumer-level, focusing on the consumption / production of automotive repair / maintenance services. The results generally supported the model, and supported nine of the twelve testable hypotheses. Theoretical and managerial implications were drawn from the findings.