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Heterogeneous Capital, Entrepreneurship, and Economic Organization

Listed author(s):
  • Nicolai Foss
  • Kirsten Foss
  • Peter G. Klein
  • Sandra K. Klein

One of Israel Kirzners 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 dIsrael Kirzner. Dans cet article, nous établissons le lien entre la théorie autrichienne du capital et la théorie de lorganisation économique. Notre point de départ est la notion autrichienne fondamentale dhétérogénéité du capital que nous interprétons en termes dattributs. De par leur nature, la plupart des biens capitaux possèdent plusieurs attributs qui peuvent demeurer inconnus aux entrepreneurs. Ceci accroît la nécessité dexpérimenter des combinaisons capitalistiques. Etant donné les coûts quentraîne la mesure des attributs, ce processus a des implications quant à lorganisation économique. Ainsi, cette perspective permet de tirer de nouvelles implications pour notre compréhension de la propriété, de lexistence et de la taille des firmes.

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Paper provided by Department of Industrial Economics and Strategy, Copenhagen Business School in its series IVS/CBS Working Papers with number 2002-02.

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Handle: RePEc:ivs:iivswp:02-02
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  1. 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.
  2. 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.
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