Towards a Learning-Based Theory of the Firm

Ard Huizing University of Amsterdam, The Netherlands

Abstract
This paper takes tentative steps towards a new learning-based theory of the firm. Its objective is to advance a separate and empirically relevant answer to the question: why do firms exist? Sometimes learning across the market will be preferred, while in other situations the firm will enjoy the advantage. A predictive theory of the firm needs to unfold these differences between both modes of organization. As in transaction cost economics, therefore, the strategy for deriving propositions is comparative institutional analysis. Given a choice between the market and the firm, which is better? The hypothesis is that learning economies will be achieved when the attributes of learning, information exchange, and the alternative modes of organization are properly attuned to each other. On this basis, several propositions are advanced identifying factors responsible for market or firm advantage. Finally, the steps taken toward a learning-based theory of the firm are captured in three implications for economic theory and for a wider theory of performance differences between firms, which is a major concern in both strategic management and resource-based thinking. Some consequences of these implications are highlighted, indicating the future research agenda.

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Reference:	Huizing, A. (2002). "Towards a Learning-Based Theory of the Firm," University of Amsterdam, Netherlands . Sprouts: Working Papers on Information Systems, 2(6). http://sprouts.aisnet.org/2-6
Keywords:	none
Item Type:	Article - Volume 2 Article 6 (2002)
Language:	English
Email:	Ard Huizing (a.huizing@uva.nl)

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