Inside the Black Box: Partnerships in Rio de Janeiro, 1870-1891
AbstractWe use newly-constructed individual-level data on partnership contracts in late nineteenth century Rio de Janeiro to examine differences between limited and unlimited liability firms and partners, and to assess the impact of a major institutional reform that facilitated the formation of joint stock companies on the terms of partnership contracts. Contrary to expectation, we find that most unlimited partners contributed capital and received profit shares, and most non-managing limited partners received salaries. Limited partners contributed more capital and received lower salaries and profit shares than their unlimited partners; unlimited partners in limited firms received more favorable terms than those in unlimited firms. Finally, we find suggestive evidence that the reforms reduced the extent of income smoothing for the limited partner and increased the average quality of unlimited liability partners in limited liability firms. These findings highlight the role of incentives and the desire for income smoothing in shaping contract terms.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Stanford Institute for Economic Policy Research in its series Discussion Papers with number 08-044.
Date of creation: Aug 2009
Date of revision:
Find related papers by JEL classification:
- J4 - Labor and Demographic Economics - - Particular Labor Markets
- N26 - Economic History - - Financial Markets and Institutions - - - Latin America; Caribbean
- N96 - Economic History - - Regional and Urban History - - - Latin America; Caribbean
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.:
- Howard Bodenhorn, 2002. "Partnership and Hold-Up in Early America," NBER Working Papers 8814, National Bureau of Economic Research, Inc.
- Naomi R. Lamoreaux & Jean-Laurent Rosenthal, 2006. "Corporate Governance and the Plight of Minority Shareholders in the United States before the Great Depression," NBER Chapters, in: Corruption and Reform: Lessons from America's Economic History, pages 125-152 National Bureau of Economic Research, Inc.
- Hilt, Eric & O'Banion, Katharine, 2009. "The Limited Partnership in New York, 1822–1858: Partnerships Without Kinship," The Journal of Economic History, Cambridge University Press, vol. 69(03), pages 615-645, September.
- Ran Abramitzky, 2008. "The Limits of Equality: Insights from the Israeli Kibbutz," The Quarterly Journal of Economics, MIT Press, vol. 123(3), pages 1111-1159, August.
- Musacchio, Aldo, 2007. "Law and Finance in Historical Perspective: Politics, Bankruptcy Law, and Corporate Governance in Brazil, 1850 2002," The Journal of Economic History, Cambridge University Press, vol. 67(02), pages 503-506, June.
- Luis A. V. Catão, 1992. "A new wholesale price index for Brazil during the period 1870-1913," Revista Brasileira de Economia, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil), vol. 46(4), pages 519-534, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jackie Buttice) The email address of this maintainer does not seem to be valid anymore. Please ask Jackie Buttice to update the entry or send us the correct address.
If references are entirely missing, you can add them using this form.