The Formative Years of the Modern Corporation: The Dutch East India Company VOC, 1602–1623

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 pol...

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Bibliographic Details
Published in:The Journal of economic history Vol. 73; no. 4; pp. 1050 - 1076
Main Authors: Gelderblom, Oscar, de Jong, Abe, Jonker, Joost
Format: Journal Article
Language:English
Published: New York, USA Cambridge University Press 01.12.2013
Cambridge Univ. Press
Subjects:
1602-1623
Asien
Capital
Charters
Colonialism
Companies
Corporate histories
Directors
Economic development
Economic history
Economic statistics
Economic theory
Experiments
Handelskompanie
International trade
Kapitalgesellschaft
Liability
Limited liability
Niederlande
Ownership
Personhood
Stockholders
Studies
Trading companies
Verenigde Oostindische Compagnie
United Kingdom > UK
Netherlands
ISSN:0022-0507, 1471-6372
Online Access:Get full text
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Summary: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.
Bibliography:SourceType-Scholarly Journals-1
ObjectType-Feature-1
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ISSN:0022-0507
1471-6372
DOI:10.1017/S0022050713000879