This paper presents a fully specified model of long-run growth in which knowledge is assumed to be an input in production that has increasing marginal productivity. It is essentially a competitive equilibrium model with endogenous technological change. In contrast to models based on diminishing returns, growth rates can be increasing over time, the effects of small disturbances can be amplified by the actions of private agents, and large countries may always grow faster than small countries. Long-run evidence is offered in support of the empirical relevance of these possibilities.

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Increasing Returns and Long-Run Growth

Given assumptions about the characteristics of knowledge and the knowledge requirements of production, the firm is conceptualized as an institution for integrating knowledge. The primary contribution of the paper is in exploring the coordination mechanisms through which firms integrate the specialist knowledge of their members. In contrast to earlier literature, knowledge is viewed as residing within the individual, and the primary role of the organization is knowledge application rather than knowledge creation. The resulting theory has implications for the basis of organizational capability, the principles of organization design (in particular, the analysis of hierarchy and the distribution of decision-making authority), and the determinants of the horizontal and vertical boundaries of the firm. More generally, the knowledge-based approach sheds new light upon current organizational innovations and trends and has far-reaching implications for management practice.

https://memberfiles.freewebs.com/84/90/65819084/documents/TOWARD%20A%20KNOWLEDGE-BASED%20THEORY%20OF%20THE.pdf

Toward a Knowledge-Based Theory of the Firm

To date, the phenomenon of entrepreneurship has lacked a conceptual framework. In this note we draw upon previous research conducted in the different social science disciplines and applied fields of business to create a conceptual framework for the field. With this framework we explain a set of empirical phenomena and predict a set of outcomes not explained or predicted by conceptual frameworks already in existence in other fields.

The Promise of Entrepreneurship as a Field of Research

This paper draws on the social and behavioral sciences in an endeavor to specify the nature and microfoundations of the capabilities necessary to sustain superior enterprise performance in an open economy with rapid innovation and globally dispersed sources of invention, innovation, and manufacturing capability. Dynamic capabilities enable business enterprises to create, deploy, and protect the intangible assets that support superior long- run business performance. The microfoundations of dynamic capabilities—the distinct skills, processes, procedures, organizational structures, decision rules, and disciplines—which undergird enterprise-level sensing, seizing, and reconfiguring capacities are difficult to develop and deploy. Enterprises with strong dynamic capabilities are intensely entrepreneurial. They not only adapt to business ecosystems, but also shape them through innovation and through collaboration with other enterprises, entities, and institutions. The framework advanced can help scholars understand the foundations of long-run enterprise success while helping managers delineate relevant strategic considerations and the priorities they must adopt to enhance enterprise performance and escape the zero profit tendency associated with operating in markets open to global competition. Copyright  2007 John Wiley & Sons, Ltd.

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Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance

Production, Information Costs, and Economic Organization

Comment on Professor Parsons' Article

Economic freedom and social responsibility

I judge the purpose of Professor Perry's article is to find the real test of values in choices and the recognition of an "apperceptive mass" in such choices. In consequence, it is quite impossible to define one ultimate value which will always determine human choice beyond the value of seeking values. If this is a correct presentation of the author's thesis, I am in agreement with him. To me the term, "value," however, has long seemed to be an algebraic sign by which men avoid handling concrete realities of life. It represents such a range of desirable goods that I sympathize with Professor Perry's desire to get concrete rather than abstract conceptions. At the same time, I do not believe that because of this recognition of the multiplicity of interests for which the word, "value," stands, there is to be no valuation of the values themselves. While it is rather adventurous to attempt an ultimate formula, the long range of human history has convinced me that such choice and consequent action as make toward the development

Frank H. Knight

Papers

Comment on Professor Parsons' Article

Economic freedom and social responsibility

Six criticisms of "the arbitrary as basis for rational morality"

Comment on Mr. Slichter's Comment and on the Issues

Book Review:The Philosophy of Henry George. George R. Geiger