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Capabilities and Governance the Rebirth of Production in the Theory of Economic Organization

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  • Richard N. Langlois
  • Nicolai J. Foss

Abstract

We argue that since Coase’s seminal 1937 paper on “The Nature of the Firm,” there has been an odd and unjustified separation between price theory and the economics of organization. For example, matters of production has been the domain of the former exclusively. However, a new approach to economic organization, here called “the capabilities approach,” that places production center-stage in the explanation of economic organization, is now emerging. We discuss the sources of this approach and its relation to the mainstream economics of organization.

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File URL: http://www3.druid.dk/wp/19970002.pdf
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Paper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 97-2.

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Date of creation: 1997
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Handle: RePEc:aal:abbswp:97-2
Contact details of provider: Web page: http://www.druid.dk/

Keywords: Capability; Theory of the Firm; Price Theory;

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Find related papers by JEL classification:
  • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
  • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
  • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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