A Theory Of The Human-Capital Based Enterprisethe Firm In The Knowledge Economy

Paul Stephen Walker A thesis submitted in partial fulfilment of the requirements of the degree of Doctor of Philosophy in Economics in the University of Canterbury Christchurch, New Zealand September 2011 A THEORY OF THE HUMAN-CAPITAL BASED ENTERPRISE THE FIRM IN THE KNOWLEDGE ECONOMY ii “Ideas are are everywhere, everywhere, but but knowledge knowledge is is rare.” rare.” “Ideas Thomas Sowell−Knowledge & Decisions (1980) “It is is aa clich´ clich´ that we we live live today today in in aa knowledge knowledge economy.” economy.” “It ee that John Kay−Culture and Prosperity (2005) “Knowledge is is our our most most powerful powerful engine engine of of production.” production.” “Knowledge Alfred Marshall−Principles of Economics (1890) the boundaries boundaries of of the the firm firm are are likely likely to to be be knowledge knowledge boundaries.” boundaries.” ““ the Kling−Unchecked and Unbalanced (2010) “Information and and knowledge knowledge are are at at the the heart heart of of organizational organizational design design ”” “Information Holmstr¨om and Roberts−The Boundaries of the Firm Revisited (1998) iv v Senior Supervisor Supervisory team Associate Supervisor Professor Les Oxley Les Oxley oci s s A ate r sso e f o Pr eld fi d o Wo n Al a vi vii Acknowledgements Thanks to my supervisory team of Les Oxley and Alan Woodfield Thanks also to Andrea Menclova and Philip Gunby for (over)use of their whiteboards and to Andrea for the soon to be famous “Andrea Arrow” Thanks are also owed to Vladimir Mencl and Stephen Hickson for the numerical evaluations in Appendix In addition thanks are due to Glenda Park who read and commented on Chapters and and improved the thesis in the process; despite hating it and to Ira for being “All Done” But most of all I thank the long suffering and much abused New Zealand taxpayer who had their money taken from them and given to me without their consent or knowledge They may justifiably ask what they got, if anything, in exchange viii ix Published material Section 1.1 and Appendix 1.A draw on material from Carlaw, Oxley, Walker, Thorns and Nuth (2006) and Oxley, Walker, Thorns and Wang (2008) A revised version of Chapter appeared as Walker (2010) A note on the method of numbering Tables and Figures The system is to use two numbers x.y where the first number, x, is the page on which the Table or Figure appears while the second number, y, is the number of the Table or Figure on that page As an example, Figure 111.3 would be the third figure on page 111 x references 293 Jones, S R H and Simon P Ville (1996a) ‘Efficient Transactors or Rent-Seeking Monopolists? 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