Enterprise Forms and Economic Efficiency

The book conducts a comparative study on the form of enterprise, focusing on broadly defined cooperative firms in comparison with conventional capitalist firms. It explores the essential advantages and disadvantages of the different types of firms and attempts to answer why capitalist firms are so prevalent in our economy. The book attempts to explain these questions from the viewpoint of "market failure" in the framework of standard microeconomic theory. In this analytical framework, it proposes an alternative system of business organization based upon consumer cooperatives and the market for their memberships, which can coexist consistently with the system of capitalist firms and the stock market within a single market economy. The existing studies of the cooperative sector have been rather ideological. The analytical framework that is presented in this book helps promote scientific exploration of cooperative and other types of firms, which are indispensable and potentially promising constituents of our society.

Kazuhiko Mikami is a Professor of Economics at the University of Hyogo, Japan. His area of study ranges from economic systems to industrial organization and public economics. As a teacher, he has taught microeconomics and industrial organization.

Overview 1. Market Power and the Form of Enterprise 1.1. Introduction 1.2. The Model 1.3. The Efficient Form of Enterprise 1.4. Empirical Observations 1.5. Conclusion 1.6. Proofs 2. Asymmetric Information and the Form of Enterprise 2.1. Introduction 2.2 The Model 2.3. The Efficient Form of Enterprise 2.4. Conclusion 2.5. Equilibrium with a Capitalistic Firm 2.6 Proofs 3. Externalities and the Form of Enterprise 3.1. Introduction 3.2. The Model 3.3. The Efficient Form of Government Enterprise 3.4. A Two-Local District Case 3.5. Conclusion 3.6. The Market for a Public Good with a Capitalist Firm 3.7. A Case with More than Two Types of Residents 3.8. Proofs 4. The Predominance of Capitalist Firms in the Market Economy 4.1. Introduction 4.2. The Model 4.3. The Efficient Form of Enterprise 4.4. An Empirical Examination 4.5. Conclusion 4.6. Proofs 5. An Alternative System of Business Organization in the Market Economy 5.1. Introduction 5.2. The Model 5.3. An Economy with no Market Failure 5.4. Market Failure in the Debt Capital Market 5.5. Market Failure in the Product Market 5.6. Conclusion 5.7. Housing Companies in Finland 5.8. Procurement of Equity Capital in the Capitalistc System when ? < 1 5.9. Proofs Bibliography Index