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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Description/Abstract

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.

Item Type: Article
ISSNs: 0014-2921 (print)
Related URLs:
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
ePrint ID: 33035
Date Deposited: 12 Dec 2007
Last Modified: 27 Mar 2014 18:20
URI: http://eprints.soton.ac.uk/id/eprint/33035

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