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Technical assets and property rights

  • Ugo Pagano


In standard neoclassical theory a double neutrality holds: the nature of the technical assets employed in production does not influence property rights and vice versa the property right structure does not influence the technology adopted by the organization. However, empirical evidence shows that changes in the technical assets employed in the economy have an important role on the evolution of its property right structure and that, vice versa, the characteristics of the owning and controlling agents influence the nature of the resources employed in production. New Institutional economics has offered a powerful rationale for the first direction of causation: in a world of positive transaction costs, property rights will tend to be acquired by the most specific and different to monitor technical assets because they can save more on agency costs when they control the organization. However, as some radical economists have emphasized the opposite direction of causation is also highly plausible: when some agents have rights on a firm the specificity and monitoring costs of their assets tends to be dramatically reduced. By integrating these two direction of causation in a single concept of organizational equilibrium, it is possible to explain the multiplicity of varieties of capitalism and to make some hypothesis on some recent global trends, such as the increasing reification of intellectual capital and the growing financialization of the world economy

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Paper provided by Department of Economics, University of Siena in its series Department of Economics University of Siena with number 657.

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Date of creation: Oct 2012
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Handle: RePEc:usi:wpaper:657
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  1. Babbage, Charles, 1832. "Economy of Machinery and Manufactures," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number babbage1832.
  2. Aoki, Masahiko, 2010. "Corporations in Evolving Diversity: Cognition, Governance, and Institutions," OUP Catalogue, Oxford University Press, number 9780199218530, December.
  3. Ugo Pagano & Maria Alessandra Rossi, 2009. "The crash of the knowledge economy," Cambridge Journal of Economics, Oxford University Press, vol. 33(4), pages 665-683, July.
  4. Ugo Pagano, 2010. "Interlocking Complementarities and Institutional Change," Department of Economics University of Siena 598, Department of Economics, University of Siena.
  5. Ugo Pagano, 2012. "No institution is a free lunch: a reconstruction of Ronald Coase," Department of Economics University of Siena 633, Department of Economics, University of Siena.
  6. Dosi, G. & Marengo, L. & Pasquali, C., 2006. "How much should society fuel the greed of innovators?: On the relations between appropriability, opportunities and rates of innovation," Research Policy, Elsevier, vol. 35(8), pages 1110-1121, October.
  7. John S. Earle & Ugo Pagano & Maria Lesi, 2002. "Information Technology, Organizational Form, and Transition to the Market," Upjohn Working Papers and Journal Articles 02-82, W.E. Upjohn Institute for Employment Research.
  8. Landini, Fabio, 2012. "Technology, property rights and organizational diversity in the software industry," Structural Change and Economic Dynamics, Elsevier, vol. 23(2), pages 137-150.
  9. Paul A. David, 2011. "Mitigating "Anticommons" Harms to Science and Technology Research," Discussion Papers 10-030, Stanford Institute for Economic Policy Research.
  10. Stephen A. Marglin, 1974. "What Do Bosses Do?," Review of Radical Political Economics, Union for Radical Political Economics, vol. 6(2), pages 60-112, July.
  11. Pagano, Ugo & Rowthorn, Robert, 1994. "Ownership, technology and institutional stability," Structural Change and Economic Dynamics, Elsevier, vol. 5(2), pages 221-242, December.
  12. Alchian, Armen A & Demsetz, Harold, 1972. "Production , Information Costs, and Economic Organization," American Economic Review, American Economic Association, vol. 62(5), pages 777-95, December.
  13. Francesca Gagliardi, 2009. "Financial development and the growth of cooperative firms," Small Business Economics, Springer, vol. 32(4), pages 439-464, April.
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  15. Arrow, Kenneth J, 1996. "Technical Information and Industrial Structure," Industrial and Corporate Change, Oxford University Press, vol. 5(2), pages 645-52.
  16. Ugo Pagano & Maria Rossi, 2004. "Incomplete Contracts, Intellectual Property and Institutional Complementarities," European Journal of Law and Economics, Springer, vol. 18(1), pages 55-76, July.
  17. Allen, Robert C., 2011. "Global Economic History: A Very Short Introduction," OUP Catalogue, Oxford University Press, number 9780199596652, December.
  18. Francesca Gagliardi, 2009. "Financial development and the growth of cooperative firms," Small Business Economics, Springer, vol. 32(2), pages 231-231, February.
  19. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817, December.
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