Capitalists and workers: knowledge and the strategic role of investment within the firm
Stewart, Geoff (1994) Capitalists and workers: knowledge and the strategic role of investment within the firm. European Economic Review, 38, (9), 1779-1797. (doi:10.1016/0014-2921(94)90050-7).
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Does the ownership of capital confer a strategic advantage within the firm? The formation of a firm frequently represents an attempt by an individual to secure a return on knowledge, and we demonstrate that, in this context, there can be an incentive to precommit capital before contracting with other members of the firm - that is, to be the ‘capitalist’. Results are also obtained on the investment level and wage rate. The key ingredient of the model is emergence of a product market entry threat from within the firm. This contrasts with the anonymous external potential entrant prevalent in the literature.
|Keywords:||capitalist, entrepreneur, knowledge, strategic investment|
|Subjects:||H Social Sciences > HG Finance
H Social Sciences > HD Industries. Land use. Labor
|Divisions:||University Structure - Pre August 2011 > School of Social Sciences > Economics
|Date Deposited:||12 Dec 2007|
|Last Modified:||27 Mar 2014 18:20|
|RDF:||RDF+N-Triples, RDF+N3, RDF+XML, Browse.|
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