A Study On The Trend Of Human Capital Roles In The Institutional Change Of The Firm

The firm is the minimum unit of the market economy, and also the micro foundation of the macro economy. The institution of the firm is various in types. The institution types of the firm include handicraft workshops, proprietorship, partnership, and modern incorporated enterprise, which show an endless evolution of the firm institution. And actually, there are various points of view on the study of the evolution of the firm institution.Based on the previous fruits of the economics and management, this paper first analysis the two basic natures of the firm and the property rights characteristics of the human capital, then place much emphasis exploring into the impact of the human capital on the optimal contractual structure of the firm. Furthermore, this paper discusses the role of the human capital during the different phases of the evolution of the firm institution.This paper first states clearly that the firm has two basic natures, e.g. the productive nature and the contractual one, and the firm is actually a productive and collaborative organization under a certain condition of contractual structure. Therefore, the human capital affects the firm institution not only by means of contractual structure of the firm but also by means of the roles it takes in production activity. Furthermore, the human capital in the firm has four main characteristics, e.g. being part of owner, specification, collaboration and renew-ability. The four main characteristics jointly ensure a unique important role of the human capital in the contractual structure of the firm.The human capital affects the optimal contractual structure of the firm in the following three aspects: the allocation of the decision power, the accumulation of the common knowledge and the increasing bargain power of itself. Using this theoretical method, this paper analysis and synthesis the history of the institutional change of the firm in the view of human capital, and conclude a human capital thread in theinstitution change of the firm.Recently, the phenomenon of family business is being widely discussed. The family business is self-enclosed from the external human capital, which is a leading factor preventing the enterprise from growing large in size, according to the human capital thread in the institutional change of the firm. To become a formal corporation and socialization is a vital problem to overcome for the Chinese private-owned enterprise. And how to invite the external human capital and make a efficient use of it is also a vital problem.