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

T HE sickness of modern civilization is a familiar theme and a fact which is obvious and not in dispute. The occurrence of two world wars within less than a generation is proof enough; and quite as sinister is the strong probability that, in the second case at least, international conflict came as the alternative to internal class war, or to chaos, in some of the major countries involved. Antagonism, war, and preparation for war between nations and allied groups can be viewed as the one psychological force capable of overcoming tendencies to conflict between interest groups within nations, groups formed chiefly along economic lines. Agreement on the fact of social unhealth does not carry us far toward common acceptance of a program of action and may, indeed, work in the opposite direction, aggravating the malady. Awareness of social disorder makes imperative a reasonable unity of opinion as to what is the matter and what to do about it, or-in medical terms-on diagnosis and treatment. In the current scene we find the most acute disagreement on these crucial points. There is intense controversy especially between two opposed schools of social-medical thought, as to the very meaning of social health. The one school views our social malady as a too-exclusive reliance upon science, upon knowledge of power, and the accumulation of means for making knowledge effective in terms of \"material comfort,\" to the neglect of the\" spiritual\" values, intellectual, aesthetic, and moral. The opposed diagnosis finds a failure to \"follow through\" with the scientific development, especially to apply scientific method to the solution of the social problem, and more specifically the economic organization. The methodsof treatment advocated follow obviously from the diagnoses. The first position is typically advocated by our humanists and literary intelligentsia, as well as by the \"preachers\" in the narrow religious sense, but perhaps derives its most serious support from organized religion. The countermovement is represented by a substantial proportion of contemporary scientists, including the human and social as well as the natural sciences, and philosophers of the \"pragmatic\" school. In this essay criticism of these social philosophies will be incidental to a more constructive task. This is the ambitious one of surveying the twofold problem, of indicating the nature of the trouble and the method or methods of treatment most likely to be effective. Our main concern is with the meaning of social health, especially the facts as to what are the

The Sickness of Liberal Society

The Business Cycle, Interest, and Money: A Methodological Approach

The bearing of its most generally accepted religion upon problems of social-economic reorganisation in a modern " Christian " nation is obviously a difficult subject to discuss objectively, or, especially, briefly. Not merely is it almost universally affected by emotional attitudes-" prejudices," religious or iconoclastic as the case may be-or by a more mundane prudential regard for religion as a supposedly vital element in social order. Even from a strictly scientific point of view, we confront virtually unanswerable questions as to the causal relations between religion and morals, or mores, or other controlling social forces in culture and conduct. The two difficulties overlap; for there is no doubt that the belief in religion as the foundation of morality, and of social order and peace, is itself held as a prejudice or a tradition far beyond any possibility of justifying it by social-psychological analysis. Many earnest scholars and thinkers who both profess to be Christians and are recognised as such, have considered the question whether modern civilisation is Christian, or if so in what sense, and have admitted themselves puzzled as to the answer. But it remains an important fact that a large majority of the people living under West-European civilisation call themselves Christian in some sense of the word, and at least profess to believe both that moral progress since ancient times has been chiefly due to the influence of Christianity and that the New Testament writings (and/or the teachings of " the Church" based thereon) afford an answer, in principle, and in large part, to all the moral and social problems faced by mankind. It is the purpose of this

Ethics and Economic Reform. III. Christianity

Abstract Economics as Absolute Ethics

S TUDENTS of ethics or social science hardly need to be reminded that one of the leading modem schools of ethical thought has been dominated by economists. The English-speaking world in particular has been utilitarian in its theory and its folk-mind from the age of the Enlightenment. Hence some reflections by an economist on utilitarianism and ethics generally may be worth consideration. For present purposes, it is the political rather than the properly ethical aspect of utilitarianism, and especially the separation of the two, which is of interest. It is one thing to ask what is Good, and another to inquire as to what social policy is to be carried out, and by what agencies, in order to realize the Good as far as possible. There might, indeed, be such a connection between the two questions that the answer to one would largely involve an answer to the other; but it is an essential feature of utilitarian theory that it makes the separation complete. The good, according to the utilitarians, is pleasure, which is a purely individual matter. We shall not stop to criticize this conception of the good. The issue regarding it is in fact largely verbal. Utilitarians expressly define the term \"pleasure\" in an all inclusive sense; it covers high pleasures and low pleasures, the pleasure of being good and that of being bad, the pleasure of peace and also that of strife, even the \"pleas-

Frank H. Knight

Papers

The Sickness of Liberal Society

The Business Cycle, Interest, and Money: A Methodological Approach

Ethics and Economic Reform. III. Christianity

Abstract Economics as Absolute Ethics

Freedom as Fact and Criterion