Incentives in Corporations: Evidence from the American Whaling Industry
AbstractIn the 1830s, when whaling was a prosperous American industry, a number of whaling corporations were chartered. All of them were short-lived. This paper analyzes the failure of corporations in the American whaling industry and argues that the corporate form was unable to create the incentives requisite for success in whaling. Most nineteenth-century whaling ventures were owned by a small number of local investors and were configured to provide powerful incentives for their managers. The effect of the corporate form on productivity is analyzed using a newly collected panel data set of 874 whaling voyages. Many whaling corporations were managed by individuals who had previously (or would subsequently) manage ventures with the usual ownership structure. Using an individual fixed effects framework, I identify a strong negative effect of the corporate form on productivity.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Law and Economics.
Volume (Year): 49 (2006)
Issue (Month): 1 (April)
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Web page: http://www.journals.uchicago.edu/JLE/
Other versions of this item:
- Eric Hilt, 2004. "Incentives in Corporations: Evidence from the American Whaling Industry," NBER Working Papers 10403, National Bureau of Economic Research, Inc.
- N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ellickson, Robert C, 1989. "A Hypothesis of Wealth-Maximizing Norms: Evidence from the Whaling Industry," Journal of Law, Economics and Organization, Oxford University Press, vol. 5(1), pages 83-97, Spring.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Allen, Douglas W & Lueck, Dean, 1998. "The Nature of the Farm," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 343-86, October.
- Hilt, Eric, 2008.
"When did Ownership Separate from Control? Corporate Governance in the Early Nineteenth Century,"
The Journal of Economic History,
Cambridge University Press, vol. 68(03), pages 645-685, September.
- Eric Hilt, 2007. "When did Ownership Separate from Control? Corporate Governance in the Early Nineteenth Century," NBER Working Papers 13093, National Bureau of Economic Research, Inc.
- Hilt, Eric, 2008.
"The negative trade-off between risk and incentives: Evidence from the american whaling industry,"
Explorations in Economic History,
Elsevier, vol. 45(4), pages 424-444, September.
- Eric Hilt, 2006. "The Negative Trade-off Between Risk and Incentives: Evidence from the American Whaling Industry," NBER Working Papers 11960, National Bureau of Economic Research, Inc.
- Eric Hilt, 2014. "Corporate Governance and the Development of Manufacturing Enterprises in Nineteenth-Century Massachusetts," NBER Working Papers 20096, National Bureau of Economic Research, Inc.
- Eric Hilt, 2014. "Corporate Governance and the Development of Manufacturing Enterprises in Nineteenth-Century Massachusetts," NBER Chapters, in: Enterprising America: Businesses, Banks, and Credit Markets in Historical Perspective National Bureau of Economic Research, Inc.
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