THE DEVELOPMENT OF THE CONCEPT OF COMPANY IN THEECONOMIC THEORY: A REVIEW OF THE MAIN CONTRIBUTIONS

José Caio Racy (), à lvaro Alves de Moura () and Paulo Rogério Scarano ()
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José Caio Racy: Universidade Presbiteriana Mackenzie (UPM)
à lvaro Alves de Moura: Universidade Presbiteriana Mackenzie (UPM)
Paulo Rogério Scarano: Universidade Presbiteriana Mackenzie (UPM)

Revista de Economia Mackenzie (REM), 2005, vol. 3, issue 3, 154-170

Abstract: The present work aims to identify the evolution of the concept of firm in theeconomic theory. Our analysis starts from the original concept of the firm as aneconomic unit, whose objective is to rationally allocate the factors of productionin order to maximize profits. Such vision was coherent with the first stages ofthe Industrial Revolution, when there were a great number of small companieswhich operated in a less concentrated market. The new dynamics of growth ofthe industrial structure that occurred from the end of century XIX,characterized by the great societies and intensified by the processes of fusions and incorporations, modified the concepts of the firm and the entrepreneur inthe economic theory. The firms, to keep its market share and to guarantee itssurvival, were then seen as diffusing centers of waves of creative destruction.Where emerged the possibility of exploring gains of scale, great conglomeratesvertically integrated in its productive chains operating in the large marketsstarted to appear. This verticality demanded a specialized and wage-earningtechnical structure. In this way, the innovative dynamics associated to sciencespeed up the process of technological development, affecting the very conceptof entrepreneur.

Keywords: Enterprise; fusions and incorporations; innovation; diversification. (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:aft:journl:v:3:3:2005:jan:dec:p:154-170

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