Entrepreneurship and Corporate Governance
Abstract
In this article, I focus on the financial-market entrepreneur—what Rothbard
(1962, 1985) calls the capitalist-entrepreneur— to outline some features of an
Austrian theory of corporate governance. I begin by reviewing the traditional,
production-function theory of the firm and suggesting two alternative perspectives:
that of the entrepreneur and that of the capitalist. I next discuss the Coasian,
or “contractual” approach to the firm and argue that it provides a useful organizing
framework for Austrian research on the firm. The subsequent section proposes
entrepreneurship and economic calculation as building blocks for an Austrian
theory of the firm. Finally, after a brief review of capital-market behavior and the
disciplinary role of takeovers, I outline four areas for Austrian research in corporate
governance: firms as investments, internal capital markets, comparative corporate
governance, and financiers as entrepreneurs.
Citation
Quarterly Journal of Austrian Economics vol. 2, no. 2 (Summer 1999): 19-42.