Firm's Network and Its Theoritic Bases

As a new kind of arrangement of economic action between markets and hierarchies, firm's network has got rapid development in both theory and practice. Its appearance changes the study emphasis of firm's theory. It even has great influence to whole economics. This paper demonstrates the concept of firm's network and its theoretic sources; and then, it discusses the theoretic bases of firm's network in the angles of Division and Specialization, Costs of transaction, Out sourcing and Common governance, as well as Competition and Team work.