Academic Contribution of Ronald H. Coase
Introduction
Cheng-Ping
Cheng (Associate Professor, Department of Finance, National Yunlin University
of Science and Technology)
Special Issue Article
1. Coase
Theory of the Firm: Property RightsIntegration and Corporate Governance
Alfred
Li-Ping Cheng (Associate Professor, Department of Information Management and
Finance, National Chiao Tung University; Policy Research Consultant, Chung-Hua
Institution for Economic Research)
2. Transaction
Cost Entrepreneurship and Competitive Strategies: An Illustration
Using
Two Taiwanese Firms
Shan-Yu
Chen (Associate Professor, Department of Economics, Feng Chia University)
Chyong-Ling
Judy Chen (Associate Professor, Department of Economics, Feng Chia University)
Ho-Don
Yan (Professor, Department of Economics, Feng Chia University)
3. How
New Institutional Economists Interpret China’s Great Transformation: Coase’s
Book as an Example
Cheng-Ping
Cheng (Associate Professor, Department of Finance, National Yunlin University
of Science and Technology)
4. Remembering
Ronald Coase and the University of Chicago Law School: From Transaction Cost to
the Marketplace of Ideas
Ching-Yi
Liu (Professor, Graduate Institute of National Development, National Taiwan
University)
5. HENA,
Appreciation, and Coase
Steven
S. Kan (Law and Economics Scholar without Academic Affiliation)
Research Note
6. In
Memoriam: Ronald H. Coase and My Immersion in Law and Economics
Lawrence
S. Liu (Chairman, CDIB Venture Capital Corporation)
7. Ronald
H. Coase: A Wholesome Economist
Ruey-Hua
Liu (Professor, Department of Economics, National Tsing Hua University)
Research Article
8. “Withered
Tree” and “Lightness of Body”: An Interdisciplinary Discussion of Zhuangzi Commentaries, the Poet’s
Embodied Cognition, and the Dialectical Diagnosis of the School of Physicians
Bi-Ming
Tsai (Associate Professor, Department of Chinese Literature, National Taiwan
University)
9. Assimilation
or Domestication? Historical Analysis on the Japanese Colonial Policies and
Elderly Welfare in Taiwan
Hubert
Liu (Assistant Professor, Department of Gerontological Care and Management,
Chang Gung University of Science and Technology)
Special Issue Article
Coase Theory of the Firm: Property Rights Integration
and Corporate Governance
Alfred
Li-Ping Cheng (Associate Professor, Department of Information Management and
Finance, National Chiao Tung University; Policy Research Consultant, Chung-Hua
Institution for Economic Research)
Based on the facts of American industrial organization in the
decades from 1900 to 1920, this paper, following Professor Coase, delineates the
integration between General Motors (GM) and Fisher Body (FB) due to their
cooperative and contractual arrangements. It is found that Coase theory of the
firm has implicitly incorporated the spirit of modern corporate governance.
This paper concludes in three aspects. On corporate governance, improving
governance structure for conducting internal and external business relationship
is the key successful factor for cooperation. The governance arrangement
through negotiation and practical experience on cooperation would therefore
guarantee final integration. On industrial technology, its exchange for
achieving competition by business operators would enhance the core competence
by understanding the complementarity between upstream and downstream firms. On
market dynamism, incentives to integration always stimulate business operators
to discover the market niche. Thus the corporate governance and the contractual
design would be the focus for integration mechanism in business practice. In
the case of GM and FB, except for the subjective appealing for the market
access by FB and expansive desire by GM, both were driven by the market,
technology and contractual arrangement into the arena of integration.
Keywords:
Coase Theory of the Firm, Property Rights, General Motors and Fisher Body,
Contractual Mechanism, Corporate Governance
Transaction Cost Entrepreneurship and Competitive
Strategies: An Illustration Using Two Taiwanese Firms
Shan-Yu
Chen (Associate Professor, Department of Economics, Feng Chia University)
Chyong-Ling
Judy Chen (Associate Professor, Department of Economics, Feng Chia University)
Ho-Don
Yan (Professor, Department of Economics, Feng Chia University)
Recounting transaction cost economics (a la Coase), this paper repositions
entrepreneurship to the center stage for firms to create their competitive
advantages through inducing consumers to choose to buy rather than to make. We
study two firms, Sinyi and Wowprime, as two examples of different strategies to
mitigate customers’ external transaction costs resulting from measurement
uncertainty and governance uncertainty. In the age of consumer sovereignty,
strategies designing by considering what obstructs customers from buying can be
rather effective, and the perspective of transaction cost theory provides a
useful concept for firms to gain competitive advantage.
Keywords:
Transaction Cost Entrepreneurship, Competitive Strategies, Sinyi, Wowprime
How New Institutional Economists Interpret China’s
Great Transformation: Coase’s Book as an Example
Cheng-Ping
Cheng (Associate Professor, Department of Finance, National Yunlin University
of Science and Technology)
In past 10 years, China, who has been resisting to change her
political system, has reached a great economic performance that is
significantly better than the ones of Russia and East European counties who
were dramatically switched to democracy regimes in 1990s. How do New
Institutional Economists (NIEs) interpret China’s great transformation since
1980s? What are the features and limitations of NIEs’ perspective in
interpreting China? In order to explore these issues, this paper first reviews
the rising of NIEs and their main theories. Then, based on Coase and Wang
(2013)’s book – How China Became Capitalist, the features of Coase’s story is
reviewed. However, there are some significant shortages and controversies in
Coase’s interpretation on China’s great transformation. Especially, it is
obviously that China has not yet successfully built a stable property right
system and legal system through which China can persistently support her
economic growth in the future. Finally, this paper figures out what should
China make efforts in order to reach an efficient institutional system.
Keywords:
Ronald Coase, New Institutional Economics, China’s Economy, Institutional
Transformation, Property Right System
Remembering Ronald Coase and the University of Chicago
Law School: From Transaction Cost to the Marketplace of Ideas
Ching-Yi
Liu (Professor, Graduate Institute of National Development, National Taiwan
University)
Ronald Coase is the most influential scholar in the history of the University
of Chicago Law School and the field of economic analysis of law. Coase’s
groundbreaking paper “the Problem of Social Cost” in 1960 offered insights
about the revolutionary concept of transaction cost and laid the foundation for
the economic analysis of law. Coase contributed a great deal in transforming
economics into a genuine social science as he made his every effort to connect
economics with the real world. His scholarship fundamentally changed the way
lawyers approach issues of when and how government should intervene in the
market.
Another intellectual impact made by Coase is his economic analysis on
the marketplace of ideas, which challenged the position held by the Supreme
Court of the United States and this extended the protection of freedom of
speech to “commercial speech” and also inspired consequent academic discourses
for several generations of scholars. Late in his life Coase continued to
emphasize “the free marketplace of ideas” in his last book How China Became Capitalist. Arguing in the book for the central role
of free marketplace of ideas in driving technological innovations and the sound
development of the market of goods services. Coase reminded us of the
importance of recognizing the fact that there is no absolute truth on the earth
and the need for keeping a free marketplace of ideas. His enduring legacy on
the free marketplace of ideas shall be the long-standing concern for anyone who
believes in constitutionalism.
Keywords:
Coase, Economic Analysis of Law, Transaction Cost, Marketplace of Ideas,
Freedom of Speech
HENA, Appreciation, and Coase
Steven
S. Kan (Law and Economics Scholar without Academic Affiliation)
Reciprocity and boundary are the most important foundation to
understanding Coase’s contribution. Deviating from the two solid foundations
will result in a misunderstanding or distortion of Coase’s idea of transaction
cost and his insights into the nature of the firm and property rights. This
article succinctly reviews Coase’s major contribution in a dialogue context of
discussing mails between a father and a daughter. In addition, this article
refutes harsh and distorting criticisms against Coase. In the aspect of pure
theory, the most important points are the subjective nature of transaction cost
and that there can be no wealth effect under the assumption of zero transaction
cost. This article also demonstrates how to correctly apply Coase’s insights to
detect problems of some of Taiwan’s recent economic policies.
Keywords:
Coase, Reciprocity, Boundary, Transaction Cost, Wealth Effect
Research Note
In Memoriam: Ronald H. Coase and My Immersion in Law
and Economics
Lawrence
S. Liu (Chairman, CDIB Venture Capital Corporation)
This paper pays tribute to Ronald H. Coase, a founder of the law and
economics (L&E) movement. It traces his relationship with the University of
Chicago and discusses the author’s immersion in L&E. I discuss the origin,
methodology, development and impact of this interdisciplinary approach in the
last half century. I use the term of immersion or pilgrimage to highlight how
it has affected the author’s own thinking and research.
This paper begins by recounting how the author became exposed to L&E
around his arrival at the University of Chicago as a student, and sets forth
how the work of giants like Coase first came as a shock to the uninitiated
author, who later embraced it wholeheartedly.
The paper contains a summary of Coase’s contribution and some anecdotes
surrounding the publication of his important papers. In passing, the author
describes his own research in recent years, in areas like capital market
reform, mergers and acquisitions, private equity, de-regulation, property right
and urban renewal, and how the L&E approach has influenced his scholarship.
This paper closes by describing Coase’s work before passing away,
and his disillusion with today's mathematics-infatuated economics profession. It
argues that L&E as espoused by Coase will be more influential if it can convert
practitioners like the author.
Keywords:
Law and Economics, Coase, Transaction Cost, Economic Reform, Taiwan
Ronald H. Coase: A Wholesome Economist
Ruey-Hua
Liu (Professor, Department of Economics, National Tsing Hua University)
1991 Nobel Prize laureate in Economics Ronald H. Coase died on September
2, 2013, aged 102, leaving a unique legacy to the economics colleagues.
Professor Coase established himself as a scholar of pioneering character that
started from the time he graduated from the university and carried over during
his entire academic career. Consequently he created the theories of transaction
cost and property rights, and led the way to the development of New Institutional
Economics. This paper was driven by my personal brief contact with Professor
Coase and written with the content of reviewing how I was inspired by his works
in school and following his academic direction later in my teaching and
research career. I wrote this paper after Professor Coase’s death was announced
to sincerely pay my respect to this great master in economics.
Keywords:
Ronald H. Coase, Transaction Cost, Property Rights
Research Article
“Withered Tree” and “Lightness of Body”: An
Interdisciplinary Discussion of Zhuangzi Commentaries,
the Poet’s Embodied Cognition, and the Dialectical Diagnosis of the School of
Physicians
Bi-Ming
Tsai (Associate Professor, Department of Chinese Literature, National Taiwan
University)
Much of Chinese scholarship on Zhuangzi
since 1912 has been based upon an idealist framework, regarding the body as a
metaphor for a theory of mind and spirit. This essay, however, argues that
techniques of both body and mind exist in Zhuangzi,
and examines Zhuangzi in light of the
School of Physicians tradition of “lightness of body.” Viewed together with
traditional Chinese medicine and poetry, the technique of “the body like a
withered tree” lets us better grasp “knowing what” such thinking of
“lightness/forgetting/loss of body” consist of, and “knowing how” to implement
the mental and bodily techniques of Zhuangzi.
Keywords:
Zhuangzi, Body Like a Withered Tree, Lightness of Body, Technique, Traditional
Chinese Medicine
Assimilation or Domestication? Historical Analysis on
the Japanese Colonial Policies and Elderly Welfare in Taiwan
Hubert
Liu (Assistant Professor, Department of Gerontological Care and Management,
Chang Gung University of Science and Technology)
This essay focuses on the elderly welfare policy in Japanese colonial
Taiwan. In terms of historical review and analysis, the relationship between the
elderly welfare policy and Japanese colonial policy is explored. Document
analysis and comparative research method are adopted in this research. Research
findings include: 1. At the beginning the Japanese colonial government involved
deeply within a “dual system” of the elderly welfare, yet colonial government’s
role was retrenched and the gentry took responsibility again to provide the
elderly welfare later. 2. In Japanese colonial time, the elderly welfare was
eminent on its “instrumental function”, which did not only serve for Japanese
colonial policy, but the aim and manner of the elderly welfare policy were
tortured. 3. Japanese colonial government implemented the elderly welfare
through the Confucianism to politically legitimize its rule and spiritually to
assimilate Taiwanese. The Japanese colonial ruling directly effects to the
backward development of the elderly welfare, and its legacies which were partly
inherited by authoritarian Kuomintang government indirectly impact to the
belated development of elderly welfare.
Keywords:
Elderly Welfare, Japanese Colonial Time, Taiwan
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