Abstract
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.
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.
| Original language | English |
|---|---|
| Pages (from-to) | 1050-1076 |
| Number of pages | 26 |
| Journal | Journal of Economic History |
| Volume | 73 |
| Issue number | 4 |
| DOIs | |
| Publication status | Published - 2013 |
Keywords
- Specialized histories (international relations, law)
- Literary theory, analysis and criticism
- Culturele activiteiten
- Overig maatschappelijk onderzoek