# The Nature of the Firm

- **Author**: Ronald H. Coase
- **Year**: 1937
- **Summary**: A Nobel Prize-winning paper that answers a fundamental question: why do firms exist? Coase's answer is that using the market has 'transaction costs' (e.g., search and information costs, bargaining costs). Firms emerge when it becomes cheaper to organize activities internally than to transact on the open market. This theory is foundational to understanding organizational structure and efficiency.
- **Link**: https://onlinelibrary.wiley.com/doi/10.1111/j.1468-0335.1937.tb00002.x
