Love, James H. (2005) On the opportunism-independent theory of the firm. Cambridge Journal of Economics, Volume 29 (Number 3). pp. 381-397. doi:10.1093/cje/beh044 ISSN 0309-166X.

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Abstract

Previous developments in the opportunism-independent theory of the firm are either restricted to special cases or are derived from the capabilities or resource-based perspective. However, a more general opportunism-independent approach can be developed, based on the work of Demsetz and Coase, which is nevertheless contractual in nature. This depends on ‘direction’, that is, deriving economic value by permitting one set of actors to direct the activities of another, and of non-human factors of production. Direction helps to explain not only firm boundaries and organisation, but also the existence of firms, without appealing to opportunism or moral hazard. The paper also considers the extent to which it is meaningful to speak of ‘contractual’ theories in the absence of opportunism, and whether this analysis can be extended beyond the employment contract to encompass ownership of assets by the firm.

Item Type:	Journal Article
Divisions:	Faculty of Social Sciences > Warwick Business School > Strategy & International Business Faculty of Social Sciences > Warwick Business School
Journal or Publication Title:	Cambridge Journal of Economics
Publisher:	Oxford University Press
ISSN:	0309-166X
Official Date:	April 2005
Dates:	Date Event April 2005 Published
Volume:	Volume 29
Number:	Number 3
Page Range:	pp. 381-397
DOI:	10.1093/cje/beh044
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access

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