Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Corporate Finance, the Theory of the Firm, and Organizations

Corporate Finance, the Theory of the Firm, and Organizations Abstract Much of the modern research on firm boundaries, following Ronald Coase (1937), assumes that firms are run by owner-managers. This contrasts with the agency literature, following Adolph Berle and Gardiner Means (1932), that emphasizes the problems that arise when managers are not owners. In this paper, the authors argue that a richer theory of the firm should integrate Coase and Berle and Means. They illustrate this point by reexamining the oft-cited merger of General Motors and Fisher Body. The authors also show how linking these literatures can be used to understand one of the key roles of corporate headquarters, the allocation of capital. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Economic Perspectives American Economic Association

Corporate Finance, the Theory of the Firm, and Organizations

Loading next page...
 
/lp/american-economic-association/corporate-finance-the-theory-of-the-firm-and-organizations-QmZ1OOJP0w

References (47)

Publisher
American Economic Association
Copyright
Copyright © 1998 by the American Economic Association
Subject
Symposia
ISSN
0895-3309
DOI
10.1257/jep.12.4.95
Publisher site
See Article on Publisher Site

Abstract

Abstract Much of the modern research on firm boundaries, following Ronald Coase (1937), assumes that firms are run by owner-managers. This contrasts with the agency literature, following Adolph Berle and Gardiner Means (1932), that emphasizes the problems that arise when managers are not owners. In this paper, the authors argue that a richer theory of the firm should integrate Coase and Berle and Means. They illustrate this point by reexamining the oft-cited merger of General Motors and Fisher Body. The authors also show how linking these literatures can be used to understand one of the key roles of corporate headquarters, the allocation of capital.

Journal

Journal of Economic PerspectivesAmerican Economic Association

Published: Nov 1, 1998

There are no references for this article.