The Ownership of the Firm under A Property Rights Approach

Leshui He ()

No 2010-23, Working papers from University of Connecticut, Department of Economics

Abstract: The boundaries of the firm and the ownership of the firm have been two of the main themes of the economics of organization over the past several decades. In this paper, I develop a general multi-party framework that integrates the ownership of the firm into the property-rights approach to the firm. I consider the ownership of the firm as the ownership of the rights to terminate cooperation with any party while maintaining a contractual or employment relation with all the other related parties of the firm. The model in this paper allows for the separation of the ownership of the firm from the ownership of the alienable assets that partly constitute it. Such a general multi-party setup may provide new tools for the study of the problem of the firm's boundaries as well as inspiration for further applications of the theory of property rights.

Keywords: Owner of the Firm; Boundary of the Firm; Property Rights Theory; Theory of the Firm. (search for similar items in EconPapers)
JEL-codes: D2 L2 Y4 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2010-09
New Economics Papers: this item is included in nep-bec and nep-hpe
Note: The author is grateful to Professor Richard N. Langlois as the dissertation advisor, and Professor Christian Zimmermann, Professor Vicki I. Knoblauch as the committee members for advice and suggestions, and to Professor Thomas J. Miceli, Professor Kathleen Segerson, Professor Xenia Matschke, and seminar participants at the Univ. of Connecticut for helpful comments. Any remaining errors are those of the author's alone.
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