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The Origin of the Capitalist Firm

An Entrepreneurial/Contractual Theory of the Firm

  • Book
  • © 2018

Overview

Authors:
  1. Weiying Zhang

    1. The National School of Development, Peking University, Beijing, China

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  • Explains the origin of the firm by focusing on entrepreneurship

  • Discusses why entrepreneurs monitor workers rather than workers monitoring entrepreneurs

  • Combines the contractual approach with the entrepreneurial approach to establish an entrepreneurial/contractual theory of the firm

  • Includes supplementary material: sn.pub/extras

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Table of contents (5 chapters)

  1. Front Matter

    Pages i-xvi
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  2. Introduction: Why Does Capital Hire Labour?

    • Weiying Zhang
    Pages 1-30

  3. Marketing, Producing, Monitoring and the Assignment of Principalship

    • Weiying Zhang
    Pages 31-76

  4. Marketing Ability, Personal Wealth, and Capital-Hiring-Labour

    • Weiying Zhang
    Pages 77-95

  5. A General Equilibrium Entrepreneurial Model of the Firm

    • Weiying Zhang
    Pages 97-133

  6. Conclusions

    • Weiying Zhang
    Pages 135-141

  7. Back Matter

    Pages 143-196
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Keywords

About this book

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. 

Authors and Affiliations

  • The National School of Development, Peking University, Beijing, China

    Weiying Zhang

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).

Bibliographic Information

  • Book Title: The Origin of the Capitalist Firm

  • Book Subtitle: An Entrepreneurial/Contractual Theory of the Firm

  • Authors: Weiying Zhang

  • DOI: https://doi.org/10.1007/978-981-10-0221-2

  • Publisher: Springer Singapore

  • eBook Packages: Business and Management, Business and Management (R0)

  • Copyright Information: Truth and Wisdom Press and Springer Science+Business Media Singapore 2018

  • Hardcover ISBN: 978-981-10-0220-5Published: 23 August 2017

  • Softcover ISBN: 978-981-10-9109-4Published: 12 August 2018

  • eBook ISBN: 978-981-10-0221-2Published: 13 August 2017

  • Edition Number: 1

  • Number of Pages: XVI, 196

  • Number of Illustrations: 20 b/w illustrations

  • Topics: Entrepreneurship, Corporate Governance, Industrial Organization

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