This paper analyzes the ownership and governance of the business corporations of New York State in the 1820s. Using a new dataset collected from the manuscript records of New York's 1823 capital tax, and from the charters of the corporations, I analyze the ownership structures of the firms, and investigate the degree to which ownership was separated from control at the time. In contrast to Berle and Means's account of the development of the corporation, the results indicate that many of the firms were dominated by large shareholders, who were represented on the firms' boards, and held sweeping power to utilize the firms' resources for their own benefit. The oppression of minority shareholders was a significant problem in early corporate governance, and many of the firms configured their voting rights in a way that curtailed the power of large investors. A positive relationship between firm value and these voting rights configurations is found among the publicly-traded firms in the sample.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
13093.
Length: Date of creation: May 2007 Date of revision: Handle: RePEc:nbr:nberwo:13093
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Find related papers by JEL classification: G3 - Financial Economics - - Corporate Finance and Governance K22 - Law and Economics - - Regulation and Business Law - - - Corporation and Securities Law M2 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913 N81 - Economic History - - Micro-Business History - - - U.S.; Canada: Pre-1913
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References listed on IDEAS 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.:
Rafael La Porta & Florencio Lopez-De-Silanes & Andrei Shleifer, 1999.
"Corporate Ownership Around the World,"
Journal of Finance,
American Finance Association, vol. 54(2), pages 471-517, 04.
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Marco Becht & J. Bradford DeLong, 2005.
"Why Has There Been So Little Block Holding in America?,"
NBER Chapters,
in: A History of Corporate Governance around the World: Family Business Groups to Professional Managers, pages 613-666
National Bureau of Economic Research, Inc.
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