The Architecture of Accounting, Law, Economics, and the Firm: An Integrated Institutional Framework
Published 2025-11-12
Keywords
- Institutional Architecture, Firm Theory, Corporate Governance, Accounting Quality, Legal Origins, Transaction Costs, Agency Theory
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
The new integrated institutional framework presented in this article regards the modern firm as an architectural system composed of four interlinked pillars: organizational structure, law, accounting, and economics. This paper generates inter-disciplinary theories to shed light on how firms access capital, manage stakeholders, and maintain their legitimacy in a complex market environment. These hypotheses include transaction cost economics (Coase, 1937; Williamson, 1985), agency theory (Jensen & Meckling, 1976), property rights theory (Grossman & Hart, 1986), corporate law (Easterbrook & Fischel, 1991), and others.This paper suggests that economics offers a logic of efficiency, law provides a set of enforceable governance structures, accounting facilitates the operationalization of economic performance through standardized measurement, and the firm integrates these mechanisms to create a coordinated institutional system. This paper makes a contribution to the corporate governance and institutional economics literature by developing a new model of systems applicable to both emerging and developed economies, and offers a set of research propositions that can be empirically tested.