IDEAS home Printed from https://ideas.repec.org/a/oup/cambje/v48y2024i3p471-488..html
   My bibliography  Save this article

The advantages of the corporate form—an impossibility theorem on persons and things

Author

Listed:
  • Johann Graf Lambsdorff

Abstract

The literature tends to view the firm either as a person or as a thing. Due to this dichotomy, it struggles with the proposition that the corporate form brings about efficiency gains that cannot be accomplished by other types of profit-seeking firms. This study supplies game-theoretic proof for this proposition. It identifies a capital-intensive business that requires external financing and is vulnerable to a holdup by a supplier. It shows that only the corporate form can organise the business while other types of firms fail. This advantage of the corporate form over other types of firms is due to its Janus-faced nature as both person, that is endowed with legal capacity, and thing, such as a transferable bundle of assets. A long-held tradition of strictly separating persons and things fails to account for this advantage.

Suggested Citation

  • Johann Graf Lambsdorff, 2024. "The advantages of the corporate form—an impossibility theorem on persons and things," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 48(3), pages 471-488.
    • Handle: RePEc:oup:cambje:v:48:y:2024:i:3:p:471-488.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/cje/beae003
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:cambje:v:48:y:2024:i:3:p:471-488.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/cje .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.