THE COMPETENCE-BASED APPROACH - VEBLENIAN IDEAS IN THE MODERN THEORY OF THE FIRM

I argue that a contemporary stronghold of a number of Thorstein Veblen 's crucial ideas can be found in the emerging competence-based approac h to the firm (e.g., Penrose, Chandler, Winter). For example, the emph asis in this literature on firms as path-dependent entities characteri sed by their heterogeneous and group-based knowledge bases can be link ed with key themes in Veblen's work. Thus, the paper presents the comp etence-based approach as a modern Veblenian approach. Moreover, the Ve blenian aspects of the competence-based approach are also those aspect s that most differentiate it from the other dominant economic approach to the firm, the contractual approach (e.g., Alchian and Demsetz, Wil liamson, Grossman and Hart). The aim of the paper is both to make this historical point and to present a contemporary body of theory that ma y with some justice be called Veblenian.