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The Firm, As Structure Of Economic Governance

Author

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  • ISACHI, Silvia Elena

    (Centre for Financial and Monetary Research “Victor Slavescu”, N.I.E.R., Romanian Academy, Bucharest, Romania)

Abstract

The purpose of this paper is to approach the theory of the governance structures, i.e., the firm, the market and the hybrid form of organization, starting from several conceptual limitations between the terms of governance and the governance proper. Each structure of governance relies on a particular type of contract (institutional component) and varies with the characteristics of the transactions. The basic distinction between the firm and the market is that the firm relies in authority in allocating the resources. Then use of the authority relations gives an advantage to the firm compared to the market, the gain from lower transaction costs. The administrative decision presumes taxation costs that are lower than the costs of negotiation and taxation of each contract of the independent transactions performed on the market.

Suggested Citation

  • ISACHI, Silvia Elena, 2016. "The Firm, As Structure Of Economic Governance," Journal of Financial and Monetary Economics, Centre of Financial and Monetary Research "Victor Slavescu", vol. 3(1), pages 123-130, October.
    • Handle: RePEc:vls:rojfme:v:3:y:2016:i:1:p:123-130
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    References listed on IDEAS

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    4. Williamson, Oliver, 2009. "The Theory of the Firm as Governance Structure: From Choice to Contract," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 111-134, December.
    5. Alchian, Armen A. & Demsetz, Harold, 1973. "The Property Right Paradigm," The Journal of Economic History, Cambridge University Press, vol. 33(1), pages 16-27, March.
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    More about this item

    Keywords

    governance structures; firm; market; hybrid governance form; transaction cost;
    All these keywords.

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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