Towards a Property Rights Foundation for a Stakeholder Theory of the Firm
Joseph Mahoney,
Cheryl Carleton () and
James Mahoney
Additional contact information
Joseph Mahoney: UIUC College of Business
James Mahoney: Federal Reserve Bank of New York
Working Papers from University of Illinois at Urbana-Champaign, College of Business
Abstract:
This paper suggests that due to the changing nature of the firm in today's business world, viewing shareholders as the sole residual claimants is an increasingly tenuous description of the actual relationships among a firm's various stakeholders. Thus, a shareholder wealth perspective is increasingly unsatisfactory for the purpose of accurately answering the two fundamental questions concerning the theory of the firm: that of economic value creation, and the distribution of that economic value. The thesis of the current paper is that examining the firm from a property rights perspective of incomplete contracting and implicit contracting provides a solid economic foundation for the revitalization of a stakeholder theory of the firm in strategic management and in expanding the resource-based theory of the firm. In order to make progress in strategic management, a clearer conceptual and empirical understanding of implicit contracting is required. The perspective outlined in this paper provides for a more accurate direction towards both measuring economic value creation, and analyzing the distribution of that value. It is also submitted that such a perspective has important implications for corporate governance, particularly when managers must balance conflicts among stakeholders to achieve the goal of maximizing economic value.
Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations:
Downloads: (external link)
http://www.business.illinois.edu/Working_Papers/papers/04-0116.pdf
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.business.illinois.edu/Working_Papers/papers/04-0116.pdf [301 Moved Permanently]--> https://giesbusiness.illinois.edu/Working_Papers/papers/04-0116.pdf)
Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:ecl:illbus:04-0116
Access Statistics for this paper
More papers in Working Papers from University of Illinois at Urbana-Champaign, College of Business Contact information at EDIRC.
Bibliographic data for series maintained by ().