IDEAS home Printed from https://ideas.repec.org/a/bpj/jeehcn/v12y2002i1n7.html
   My bibliography  Save this article

Heterogeneous Capital, Entrepreneurship, and Economic Organization

Author

Listed:
  • Foss Kirsten

    (@@@@)

  • Foss Nicolai

    (Copenhagen Business School)

  • Klein Peter G.

    (@@@@)

  • Klein Sandra K.

    (University of Georgia)

Abstract

One of Israel Kirzner's less wellknown contributions is to the theory of capital. In this paper, we link the Austrian theory of capital and the theory of economic organization. Our starting point is the key Austrian notion of capital heterogeneity which we interpret in terms of attributes. Most capital assets are multi-attribute in nature, and many attributes may not be known to entrepreneurs. This fosters a need for experimenting with capital combinations. Because there are costs of measuring attributes, this process has implications for economic organization. Thus, we argue that novel implications for the understanding of ownership and the existence and boundaries of firms may be teased out of such a perspective.La théorie du capital représente une des contributions les moins connues d'Israel Kirzner. Dans cet article, nous établissons le lien entre la théorie autrichienne du capital et la théorie de l'organisation économique. Notre point de départ est la notion autrichienne fondamentale d'hétérogénéité du capital que nous interprétons en termes d'attributs. De par leur nature, la plupart des biens capitaux possèdent plusieurs attributs qui peuvent demeurer inconnus aux entrepreneurs. Ceci accroît la nécessité d'expérimenter des combinaisons capitalistiques. Etant donné les coûts qu'entraîne la mesure des attributs, ce processus a des implications quant à l'organisation économique. Ainsi, cette perspective permet de tirer de nouvelles implications pour notre compréhension de la propriété, de l'existence et de la taille des firmes.

Suggested Citation

  • Foss Kirsten & Foss Nicolai & Klein Peter G. & Klein Sandra K., 2002. "Heterogeneous Capital, Entrepreneurship, and Economic Organization," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 12(1), pages 1-20, March.
  • Handle: RePEc:bpj:jeehcn:v:12:y:2002:i:1:n:7
    DOI: 10.2202/1145-6396.1049
    as

    Download full text from publisher

    File URL: https://doi.org/10.2202/1145-6396.1049
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    File URL: https://libkey.io/10.2202/1145-6396.1049?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    Other versions of this item:

    References listed on IDEAS

    as
    1. Foss, Nicolai Juul, 1994. "The Theory of the Firm: The Austrians as Precursors and Critics of Contemporary Theory," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 7(1), pages 31-65.
    2. Barzel, Yoram, 1994. "The capture of wealth by monopolists and the protection of property rights," International Review of Law and Economics, Elsevier, vol. 14(4), pages 393-409, December.
    3. Laurence Moss, 1991. "The Chicago Intellectual Property Rights Tradition and the Reconciliation of Coase and Hayek," Eastern Economic Journal, Eastern Economic Association, vol. 17(2), pages 145-156, Apr-Jun.
    4. Dulbecco, Philippe & Garrouste, Pierre, 1999. "Towards an Austrian Theory of the Firm," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 12(1), pages 43-64.
    5. Pierre Garrouste & Philippe Dulbecco, 1999. "Towards an Austrian Theory of the Firm," Post-Print halshs-01300362, HAL.
    6. Nicolai J. Foss, 1996. "Firms, Incomplete Contracts and Organizational Learning," DRUID Working Papers 96-2, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    7. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-795, December.
    8. Minkler, Alanson P, 1993. "The Problem with Dispersed Knowledge: Firms in Theory and Practice," Kyklos, Wiley Blackwell, vol. 46(4), pages 569-587.
    9. Peter Maskell, 1996. "Localised Low-tech Learning in the Furniture Industry," DRUID Working Papers 96-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    10. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
    11. Richard N. Langlois & Nicolai J. Foss, 1999. "Capabilities and Governance: The Rebirth of Production in the Theory of Economic Organization," Kyklos, Wiley Blackwell, vol. 52(2), pages 201-218, May.
    12. Philippe Dulbecco & Pierre Garrouste, 1999. "Towards an Austrian theory of the firm," Post-Print halshs-00274296, HAL.
    13. Jarrell, Gregg A & Brickley, James A & Netter, Jeffry M, 1988. "The Market for Corporate Control: The Empirical Evidence Since 1980," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 49-68, Winter.
    14. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    15. Barzel,Yoram, 1997. "Economic Analysis of Property Rights," Cambridge Books, Cambridge University Press, number 9780521597135, February.
    16. Matsusaka, John G, 2001. "Corporate Diversification, Value Maximization, and Organizational Capabilities," The Journal of Business, University of Chicago Press, vol. 74(3), pages 409-431, July.
    17. Nicolai J. Foss & Peter G. Klein (ed.), 2002. "Entrepreneurship and the Firm," Books, Edward Elgar Publishing, number 2377.
    18. Langlois, Richard N & Foss, Nicolai J, 1999. "Capabilities and Governance: The Rebirth of Production in the Theory of Economic Organization," Kyklos, Wiley Blackwell, vol. 52(2), pages 201-218.
    19. Klein, Peter G, 1996. "Economic Calculation and the Limits of Organization," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 9(2), pages 3-28.
    20. Witt, Ulrich, 1999. "Do Entrepreneurs Need Firms? A Contribution to a Missing Chapter in Austrian Economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 11(1-2), pages 99-109.
    21. Kirsten Foss & Nicolai Foss, 2001. "Assets, Attributes and Ownership," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(1), pages 19-37.
    22. Milbourn, Todd T. & Boot, Arnoud W. A. & Thakor, Anjan V., 1999. "Megamergers and expanded scope: Theories of bank size and activity diversity," Journal of Banking & Finance, Elsevier, vol. 23(2-4), pages 195-214, February.
    23. Alanson P. Minkler, 1993. "The Problem with Dispersed Knowledge: Firms in Theory and Practice," Kyklos, Wiley Blackwell, vol. 46(4), pages 569-587, November.
    24. Israel M. Kirzner, 1997. "Entrepreneurial Discovery and the Competitive Market Process: An Austrian Approach," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 60-85, March.
    25. H. B. Malmgren, 1961. "Information, Expectations and the Theory of the Firm," The Quarterly Journal of Economics, Oxford University Press, vol. 75(3), pages 399-421.
    26. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    27. Israel M. Kirzner, 1996. "Essays on Capital and Interest," Books, Edward Elgar Publishing, number 1009.
    28. William M. Dugger, 1996. "The Mechanisms of Governance," Journal of Economic Issues, Taylor & Francis Journals, vol. 30(4), pages 1212-1216, December.
    29. Elaine Mosakowski, 1997. "Strategy Making Under Causal Ambiguity: Conceptual Issues and Empirical Evidence," Organization Science, INFORMS, vol. 8(4), pages 414-442, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Saras D. Sarasvathy & Nicholas Dew, 2013. "Without judgment: An empirically-based entrepreneurial theory of the firm," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(3), pages 277-296, September.
    2. Stefan W. Schmitz, 2004. "Uncertainty in the Austrian Theory of Capital," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 17(1), pages 67-85, March.
    3. Richard N. Langlois, 2013. "The Austrian theory of the firm: Retrospect and prospect," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(3), pages 247-258, September.
    4. Nicolai J. Foss & Peter G. Klein, 2004. "Entrepreneurshoip and the Economic Theory of the Firm Any Gains from Trade?," DRUID Working Papers 04-12, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nicolai J. Foss & Peter G. Klein, 2010. "Austrian Economics and the Theory of the Firm," Chapters, in: Peter G. Klein & Michael E. Sykuta (ed.), The Elgar Companion to Transaction Cost Economics, chapter 27, Edward Elgar Publishing.
    2. Saras D. Sarasvathy & Nicholas Dew, 2013. "Without judgment: An empirically-based entrepreneurial theory of the firm," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(3), pages 277-296, September.
    3. Richard N. Langlois, 2013. "The Austrian theory of the firm: Retrospect and prospect," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(3), pages 247-258, September.
    4. Foss Nicolai J., 2004. "Cognition and Motivation in the Theory of the Firm: Interaction or "Never the Twain Shall Meet"?," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 14(1), pages 1-24, March.
    5. Gibbons, Robert, 2005. "Four forma(lizable) theories of the firm?," Journal of Economic Behavior & Organization, Elsevier, vol. 58(2), pages 200-245, October.
    6. Nicolai J. Foss & Peter G. Klein, 2004. "Entrepreneurshoip and the Economic Theory of the Firm Any Gains from Trade?," DRUID Working Papers 04-12, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    7. Giampaolo Garzarelli & Matthew Holian, 2014. "Parchment, guns, and the problem of governance," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 27(1), pages 71-80, March.
    8. Richard P. Adelstein, 2003. "Knowledge and Power in the Mechanical Firm: Planning for Profit in Austrian Perspective," Wesleyan Economics Working Papers 2005-015, Wesleyan University, Department of Economics.
    9. Nicolai J. Foss, 2010. "Property Rights Economics," Chapters, in: Peter G. Klein & Michael E. Sykuta (ed.), The Elgar Companion to Transaction Cost Economics, chapter 10, Edward Elgar Publishing.
    10. Pierre Garrouste, 2008. "The Austrian roots of the economics of institutions," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 21(4), pages 251-269, December.
    11. Kirsten Foss & Nicolai Foss, 2001. "Assets, Attributes and Ownership," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(1), pages 19-37.
    12. Argandoña, Antonio, 2010. "From action theory to the theory of the firm," IESE Research Papers D/855, IESE Business School.
    13. Nicolai J. Foss, 1997. "Incomplete Contracts and Economic Organization Brian Loasby and the Theory of the Firm," DRUID Working Papers 97-11, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    14. Kim, Jongwook & Mahoney, Joseph T., 2008. "A Strategic Theory of the Firm as a Nexus of Incomplete Contracts: A Property Rights Approach," Working Papers 08-0108, University of Illinois at Urbana-Champaign, College of Business.
    15. Minkler, Lanse, 2004. "Shirking and motivations in firms: survey evidence on worker attitudes," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 863-884, June.
    16. Darcy W E Allen, 2020. "When Entrepreneurs Meet:The Collective Governance of New Ideas," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number q0269, Juni.
    17. Nicolai J. Foss, 1998. "Firms and the Coordination of KnowledgeSome Austrian Insights," DRUID Working Papers 98-19, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    18. Foss, Nicolai J., 2003. "Bounded rationality in the economics of organization: "Much cited and little used"," Journal of Economic Psychology, Elsevier, vol. 24(2), pages 245-264, April.
    19. Nicolai J. Foss & Peter G. Klein, 2005. "The Theory of the Firm and Its Critics A Stocktaking and Assessment," DRUID Working Papers 05-03, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    20. Fikret Adaman & Pat Devine, 2002. "A Reconsideration of the Theory of Entrepreneurship: A participatory approach," Review of Political Economy, Taylor & Francis Journals, vol. 14(3), pages 329-355.

    More about this item

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • B53 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Austrian
    • D2 - Microeconomics - - Production and Organizations

    Statistics

    Access and download statistics

    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:bpj:jeehcn:v:12:y:2002:i:1:n:7. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    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.