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.:
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NBER Working Papers
13093, National Bureau of Economic Research, Inc.
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- Eric Hilt, 2014.
"Corporate Governance and the Development of Manufacturing Enterprises in Nineteenth-Century Massachusetts,"
in: Enterprising America: Businesses, Banks, and Credit Markets in Historical Perspective
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.
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"The negative trade-off between risk and incentives: Evidence from the american whaling industry,"
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- 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.
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