Which theories can explain the emerging economic problems? Theories of the firm in the new institutional economics

Abstract

The article presents basic assumptions and new theories of the firm connected with New Institutional Economics (NIE). NIE is regarded as a stream of research which enlarges and enriches the neoclassical economics. NIE focuses on the phenomena ignored by the traditional economics. The research field of NIE is very diversified but the adhesive which integrates all its streams is the idea that the main determinants of the development are institutions. The following part of the article contains a brief presentation of the notion, the significance and the types of institutions. It is stated that the market and its mechanisms depend on the characteristics of institutions which define its nature. Next the article presents briefly new theories of the firm related to NIE – the moral hazard or agency- theoretic approach, transaction cost economics approach and „capabilities” approach. The last part of the article examines the importance of institutions for creating the competitive advantage of a firm and of economies.