The Presence Of Analysis

About the firm's being, modern theory of the firm (MIF) gives an incomplete answer "transaction cost". Finn's being is just the means of economizing the market's transaction cost. We believe that concerning being's problem, the formal answer should be inquired in two ways: the being's inner and external.The transaction cost hypothesis is just from the outside, yet, a formal answer should be based on "researching the inner". According to this concept, we sort out the theories, construct a conception of "comparative advantage of institution" and form an idea of firm: it is a productive mechanism of institution, which is a dual-contract of agents and production. With this concept, we try to explain the question about the boundary of the firm.The paper is made of four parts: in part one, we resort the theories about firm and give the key point of the question; part two is the body, in which we found a simple model based on four explaining factors: economy of the division of labor, coordination's economy, scale's economy and innovation's economy; part three, gives one illustration to exam ours hypothesis; the last part gets a conclusion and point out the shortcoming of the essay at the same time.We centre on innovation and logic of the question, so few words on the correlated forward theory.