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 American whaling, and argues that the corporate form was unable to create the incentives requisite for success in the industry. 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 dataset 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, a strong negative effect of the corporate form on productivity is identified.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10403.
Date of creation: Apr 2004
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Other versions of this item:
- Hilt, Eric, 2006. "Incentives in Corporations: Evidence from the American Whaling Industry," Journal of Law and Economics, University of Chicago Press, vol. 49(1), pages 197-227, April.
- N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
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