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The (non)Theory of the Knowledge Firm

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Abstract

This paper argues that the mainstream approaches to the theory of the firm do not provide a theory of the human capital based or knowledge based firm. We examine the textbook (neoclassical) theory of the firm, the transaction cost model, the incentive-system approach and the Grossman Hart Moore approach to the firm and argue that none of them are able to fully capture the changes to the firm that the movement towards a knowledge economy entails. We also consider the effects of knowledge on the location of production.

Suggested Citation

  • Paul Walker, 2008. "The (non)Theory of the Knowledge Firm," Working Papers in Economics 08/07, University of Canterbury, Department of Economics and Finance.
    • Handle: RePEc:cbt:econwp:08/07
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    File URL: https://repec.canterbury.ac.nz/cbt/econwp/0807.pdf
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    More about this item

    Keywords

    Theory of the firm; Knowledge economy; Human-capital based firm;
    All these keywords.

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production

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