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Theories of the Firm


  • John Kay


Since the seminal contributions of Coase, Williamson, Jensen and Meckling, and Easterbrook and Fischel, the characterisation of the firm as a nexus of contracts, its boundaries determined by the relative costs of markets and hierarchical organisation, has dominated the economic theory of the firm. The capabilities-based approach of Penrose, largely ignored by economists but developed in the resource-based theory of business strategy, provides a more illuminating perspective on a globalised and evolving business environment.

Suggested Citation

  • John Kay, 2018. "Theories of the Firm," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 25(1), pages 11-17, January.
  • Handle: RePEc:taf:ijecbs:v:25:y:2018:i:1:p:11-17
    DOI: 10.1080/13571516.2017.1402468

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