In search of an evolutionary theory of the firm

The last decades have seen a growing interest in the theory of the firm by economic theory. Different theoretical strands have been developed, each trying to go further than the standard micro model of the firm as a capital-labour function. The original question of what is the firm can be traced back to the classic work of Coase (1937) still, his questions were only again effectively grasped in the seventies by Alchian and Demstez (1972) which tried to justify the existence of the firm during times when mainstream economics was being challenged by non-hierarchical proposals from the emergent radical schools (Tinel, 2002). In the eighties Coase encounters his most close disciples in Transaction Costs Economics (Williamson, 1975), which develop the coasian idea of the firm as the efficient alternative to high transaction costs in markets. More recently, a more hard-core neo-classical theory focused on property rights (Hart, 1990) raised substantially different questions (and answers) about the firm. Despite significant differences, all these theories have a common theoretical background which preserves fundamental neoclassical propositions such as profit maximization or equilibrium approaches.