Affiliation:
1. The Center for Economic Research Shandong University Jinan China
Abstract
AbstractThis paper defines the “new” institutional economics pioneered by Coase's contributionas “neoclassical” institutional economics. It develops the firm theory on the basis of criticizing neoclassical economics for treating firms as black boxes. Coase's contribution is ground‐breaking: He created the transaction cost theory, reinterpreted the origin and essence of firms and the changes in firm size, and analyzed the internal power structure of firms from a contractual perspective. The follow‐up economists build incomplete contract theory, principal–agent theory, team production theory, corporate governance theory, mechanism design theory, and comparative institutional advantage theory to further develop the firm theory. Finally, according to the characteristics of China's economy, this paper provides the future direction of the firm theory.
Reference14 articles.
1. Production, information costs, and economic organization;Alchian A. A.;The American Economic Review,1972
2. Horizontal vs. vertical information structure of the firm;Aoki M.;The American Economic Review,1986
3. The Contractual Nature of the Firm