TY - JOUR
T1 - The Formative Years of the Modern Corporation: The Dutch East India Company, 1602-1623.
AU - de Jong, Abe
AU - Gelderblom, Oscar
AU - Jonker, Joost
PY - 2013
Y1 - 2013
N2 - With their legal personhood, permanent capital, transferable shares, separation of ownership and management, and limited liability, the Dutch and English colonial trading companies VOC and EIC are considered institutional breakthroughs. We analyze the VOC's business operations and financial policy and show that its novel corporate form owed less to foresight than to piecemeal engineering to remedy design flaws. The crucial feature of managerial limited liability was not, as previously thought, integral to that design, but emerged only after protracted experiments with various solutions to the company's financial bottlenecks. Legal form followed economic function, not the other way around.
AB - With their legal personhood, permanent capital, transferable shares, separation of ownership and management, and limited liability, the Dutch and English colonial trading companies VOC and EIC are considered institutional breakthroughs. We analyze the VOC's business operations and financial policy and show that its novel corporate form owed less to foresight than to piecemeal engineering to remedy design flaws. The crucial feature of managerial limited liability was not, as previously thought, integral to that design, but emerged only after protracted experiments with various solutions to the company's financial bottlenecks. Legal form followed economic function, not the other way around.
U2 - 10.1017/S0022050713000879
DO - 10.1017/S0022050713000879
M3 - Article
SN - 0022-0507
VL - 73
SP - 1050
EP - 1076
JO - The Journal of Economic History
JF - The Journal of Economic History
IS - 4
ER -