The Origin Of The Capitalist Firm: An Entrepreneurial/contractual Theory Of The Firm
by Weiying Zhang /
2017 / English / PDF
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The book addresses the entrepreneurial origin of the capitalist
firm and its asymmetric contractual relationships between
capitalists, workers, managers and entrepreneurs, and explains
the origin of the firm by focusing on entrepreneurship. A hidden
action model shows how assigning residual claim to entrepreneurs
can provide a better overall incentive; a hidden information
model demonstrates that capitalists are given priority and have
authority to select the management, because capital can signal
entrepreneurial ability; and a general equilibrium
entrepreneurial model shows that the equilibrium relationships
between different members of the firm depend on the joint
distribution of ability, wealth and risk attitudes in the
population. Overall, the book reveals that the capitalist firm is
more efficient, not only because it provides better incentives
but also because it ensures that the most entrepreneurial people
control the firm.
The book addresses the entrepreneurial origin of the capitalist
firm and its asymmetric contractual relationships between
capitalists, workers, managers and entrepreneurs, and explains
the origin of the firm by focusing on entrepreneurship. A hidden
action model shows how assigning residual claim to entrepreneurs
can provide a better overall incentive; a hidden information
model demonstrates that capitalists are given priority and have
authority to select the management, because capital can signal
entrepreneurial ability; and a general equilibrium
entrepreneurial model shows that the equilibrium relationships
between different members of the firm depend on the joint
distribution of ability, wealth and risk attitudes in the
population. Overall, the book reveals that the capitalist firm is
more efficient, not only because it provides better incentives
but also because it ensures that the most entrepreneurial people
control the firm.