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The Origin of the Capitalist Firm

An Entrepreneurial/Contractual Theory of the Firm

  • Weiying Zhang

Table of contents

  1. Front Matter
    Pages i-xvi
  2. Weiying Zhang
    Pages 135-141
  3. Back Matter
    Pages 143-196

About this book

Introduction

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. 

Keywords

Entrepreneurship Wealth Principalship Capital-hiring-labor Capitalist Firm

Authors and affiliations

  • Weiying Zhang
    • 1
  1. 1.The National School of DevelopmentPeking UniversityBeijingChina

Bibliographic information

  • DOI https://doi.org/10.1007/978-981-10-0221-2
  • Copyright Information Truth and Wisdom Press and Springer Science+Business Media Singapore 2018
  • Publisher Name Springer, Singapore
  • eBook Packages Business and Management
  • Print ISBN 978-981-10-0220-5
  • Online ISBN 978-981-10-0221-2
  • Buy this book on publisher's site