The Origin of the Capitalist Firm: An Entrepreneurial/Contractual Theory of the Firm

by Weiying Zhang

Overview

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.

Product Details

ISBN-13:	9789811002205
Publisher:	Springer Nature Singapore
Publication date:	08/15/2017
Edition description:	1st ed. 2018
Pages:	196
Product dimensions:	6.10(w) x 9.25(h) x (d)

About the Author

Weiying Zhang is the Sinar Mas Chair Professor of Economics National School of Development, Peking University. He received D. Phil in economics from Oxford. His research interests are industrial organization and theory of the firm; game and society; corporate governance; economic transition in China; law and economics; strategy and competitiveness and philosophy of economics. His published books including Game Theory and Information Economics, The Theory of the Firm and Chinese Enterprise Reform, The Logic of the Market: An Insider’s View of Chinese Economic Reform, etc. all have great academic impact. His insightful and provocative opinions about China’s reform have been widely reported both in China and in international media (such as WSJ, FT and NYT).

Table of Contents

Preface to the second edition.- Preface to the first edition.- Acknowledgements.- Chapter 1 Introduction: Why Does Capital Hire Labour?.- Chapter 2 Marketing, Producing, Monitoring and the Assignment of Principalship.- Chapter 3 Marketing Ability, Personal Wealth and Capital-Hiring-Labour.- Chapter 4 A General Equilibrium Entrepreneurial Model of the Firm.- Chapter 5 Conclusions.- References.- Appendix 1: A Principal-agent Theory of Public Economy and Its Applications to China.- Appendix 2: Decision Rights, Residual Claim and Performance: A Theory of How Chinese State-owned Enterprise Reform Works.