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Digital Platforms and the Nature of the Firm

Laurent Baronian

Journal of Economic Issues, 2020, vol. 54, issue 1, 214-232

Abstract: Digital platforms turn traditional approaches of the firm, which relied on the wage relation to explain the major difference between firm and market, upside down and underline the advantages of coordination through organization over coordination through market. This study aims to propose a definition of the firm able to integrate, besides the integrated firm, also hybrid forms such as networks of subcontractor/subcontracting firms as well as atypical forms such as digital platforms. By reactivating the firm-boundary problem, this article suggests putting valorization by labor at the heart of the firm’s decisions concerning integration. It suggests therefore a general definition of the firm as a techno-institutional center of capital valorization, provided that firms make profits by means of the appropriation of labor incorporated into their (productive, structural, intellectual) capital through institutional arrangements. By stressing the relation of production between the owners of the means of production and the direct producers, the approach of the firm supported here should allow to cover the different existing models of the firm, from the classical firm to hybrid models, around which the boundary debate has revolved, to digital platforms.

Date: 2020
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DOI: 10.1080/00213624.2020.1720588

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Handle: RePEc:mes:jeciss:v:54:y:2020:i:1:p:214-232