Huang Kai Nan

(Center for Economic Research, Shandong University)

Abstract: By the comparison and merging between contract theoy and evolutionary theory of the firm, the article attempts to illustrate a more universal concept about nature of the firm, and concludes that the existence, boundary and internal organization of the firm have been impacted by both transaction cost and knowledge accumulation. We consider that the cognition process and contract designing have both existed in the cycle of the learning process of the firm. The primary purpose of the firm is to make the judgment of the entrepreneur come true, and by the accumulation of the common knowledge and after implicit knowledge turns to explicit knowledge, the firm enter into the phase of contract designing. Therefore, we established a analysis logic between knowledge evoloution and contract designing.

Key Words:the nature of the firm contract thoery evolutionary theory of the firm