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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), pp. 1779-1797. (doi:10.1016/0014-2921(94)90050-7).

Record type: Article


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.

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Published date: December 1994
Keywords: capitalist, entrepreneur, knowledge, strategic investment


Local EPrints ID: 33035
ISSN: 0014-2921
PURE UUID: cf8b76d8-0a3d-45f7-978d-4f9f01fd5e64

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Date deposited: 12 Dec 2007
Last modified: 17 Jul 2017 15:54

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Author: Geoff Stewart

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