Firms and the Reciprocity of the process of investing and the act of working

This paper contributes to resource-based view (RBV) and theory of the firm scholarship by explaining why the process of investing and act of working through the vehicle of the firm are reciprocal concepts, depending on the view taken. It argues that capital-owners and resource-owners both invest in the firm and in their own way they also perform work through the firm. Moreover, by adding a dynamic explicit and implicit contracting overlay to a resource-investment conceptualization of the firm, this paper identifies how it is possible to define ‘work’ and ‘work equity’ in firm theoretic terms, that is, define them in resource-capital-payments and resource-capital-contract parity terms, respectively, making it much easier potentially to gain insight into the ways in which firms improve people’s lives by contributing to positive forms of economic development.