Marrying in the Cathedral: A Framework for the Analysis of Corporate Governance

32 Pages Posted: 29 Sep 2009

See all articles by Ugo Pagano

Ugo Pagano

University of Siena - Department of Economics

Date Written: September 28, 2009

Abstract

The firm can be seen as a centralization of market transactions and as a decentralization of a public ordering which allows the management of joint liabilities. The paper advances the view that the main reason for the firm’s existence is the unification and the internalization of liabilities. From this perspective, Coase's and Fuller's contributions to the theory of the firm can be married within the architecture of Calabresi's Cathedral. Because of specific (dis)investments, fundamental transformations from competition to managed bilateral monopoly take place either in the public or the private sphere and provide an explanation for the ultimate nature of the firm.

Keywords: Corporate Governance, Firms' Liability, Private Orderings, Guido Calabresi

Suggested Citation

Pagano, Ugo, Marrying in the Cathedral: A Framework for the Analysis of Corporate Governance (September 28, 2009). Available at SSRN: https://ssrn.com/abstract=1479702 or http://dx.doi.org/10.2139/ssrn.1479702

Ugo Pagano (Contact Author)

University of Siena - Department of Economics ( email )

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