Innovation And Firm Institution Changes Under The Perspecve Of Evolutionary Economics

Since the British Industrial Revolution, the firm as an institution has beenchanged greatly. From the perspective of ownership of firm, firm’s ownership hadchanged from the Individual proprietorships, partnerships to corporations, and thenumber of shareholders of firms has a trend of enlargement; From the perspective ofproperty rights structure of firm, firms’ property rights gradually moved fromshareholder to senior managers and middle managers.It is no doubt that what had beenpointed out by Berle and Means, that in the modern world, those who legally haveownership over companies have been separated from their control, is an indisputablefact that happened in the history and still happens in some firms. In addition, theinstitutional vicissitude of firms that occoured in some industries didn’t happen inother industries. What’s the driving force behind this series of firms’ institutionalchange?By clue of features of industry-specific knowledge of production technology andits subsequent innovations, the article tries to analyze how the production technologyand firms’ institution co-evole in “variation, selection, genetic “analytical frameworkof the evolutionary economics. First of all, in the long term, the productiontechnology co-evoles with firms’ institution; secondly, in different industries,production technology and its subsequent innovations differs in: form of knowledge,the relationship between innovation and the original production technology, whetherinnovation is the key part of new production technology, the cost in theimplementation of innovation, and these characteristics together with the originalproduction technology determines the structure of firms’ ownership and propertyrights. third, based on views above, this paper analyzes, from the first industrialrevolution to the second industrial revolution, how firms’ institution of specificindustry co-evoles with innovations; At the same time, the paper also pay attention tothe industries that didn’t affected by the vast vicissitude that happened in the history.Finally, on the basis of historical analysis, this paper uses Net Logo software toreproduces the history of how firms’ institution of specific industry co-evoles withinnovations.