A view of business incorporation and development: The transaction approach through agent-based modeling

Subject. The article deals with reasons and the nature of business incorporation and development, as the neoclassical approach to studying economic processes becomes more popular. Objectives. The study evaluates the validation of business incorporation theories using the apparatus of the institutional economic and the transaction approach. The article aims to check the verification of theoretical concepts concerning reasons and the nature of business incorporation and development through the modern method of agent-based modeling. Methods. We apply methods of logic research, economic analysis and synthesis through the creative systems approach, agent-based modeling. Research is novel as it substantiates that additional specialization has an impact on business incorporation and development. Results. We understood the substance of the transaction approach in the economy and unfolded theoretical concepts concerning the nature of business incorporation and development. We conducted the comparative analysis by dividing them into the R. Coase’s theory of the firm and preceding concepts of business nature. We tested and built the agent-based model in accordance with key aspects of the above theoretical concepts. The article presents results of modeling and provides recommendation for higher efficiency and motivation for business development. Conclusions and Relevance. The theoretical views of both theories of the firm and the outcome of agent-based modeling prove that transaction costs lead to business incorporation, which verified the theory of R. Coase concerning the integration into the firm.

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