Beyond versus : the institutional coevolution of the firm and the corporation

This paper elucidates the firm and corporation’s institutional coevolution via the firm-corporation linkage debate between legal institutionalism (LI) and world power system theory (WPS). To drive a sustainability transition , it proposes ‘regenerative characteristics’ – extending multidomain, multitemporal, and ecosystem characteristics. Employing a transdisciplinary approach, the study synthesises LI’s ‘emergentist’ and WPS’s ‘separation’ views through comparative institutional analysis (CIA). Integrating corporate actor theory with an Ostromian perspective, it extends CIA to identify position as the generative mechanism linking micro-level actions to macro-level institutions. Theoretically, law structures coevolutionary governance, joint production demands an agreement of joint responsibility, and ‘negotiated governance’ emphasises capability evolution. Rejecting shareholder primacy, policies must tie legal recognition to external responsibilities, foster education for moral judgement, and incentivise regenerative characteristics. Ultimately, negotiated governance transforms the firm-corporation linkage into a responsible constituent of the global commons.