The Formative Years of the Modern Corporation: The Dutch East India Company VOC, 1602-1623
AbstractWith their legal personhood, permanent capital with transferable shares, separation of ownership and management, and limited liability for both shareholders and managers, the Dutch East India Company (VOC) and subsequently the English East India Company (EIC) are generally considered a major institutional breakthrough. Our analysis of the business operations and notably the financial policy of the VOC during the company’s first two decades in existence shows that its corporate form owed less to foresight than to constant piecemeal engineering to remedy original design flaws brought to light by prolonged exposure to the strains of the Asian trade. Moreover, the crucial feature of limited liability for managers was not, as previously thought, part and parcel of that design, but emerged only after a long period of experimenting with various, sometimes very ingenious, solutions to the company’s financial bottlenecks.
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 Utrecht University, Centre for Global Economic History in its series Working Papers with number 0036.
Length: 61 pages
Date of creation: Aug 2012
Date of revision:
Dutch East India Company (VOC); corporate governance; Dutch Republic; financial markets; colonial expansion;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-09 (All new papers)
- NEP-HIS-2012-09-09 (Business, Economic & Financial History)
- NEP-HME-2012-09-09 (Heterodox Microeconomics)
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.:
- Andrei Shleifer & Robert W. Vishny, 1995.
"A Survey of Corporate Governance,"
Harvard Institute of Economic Research Working Papers
1741, Harvard - Institute of Economic Research.
- S R H Jones & Simon P Ville, . "Efficient Institutions or Rent Seeking Monopolists? The Rationale for Early Chartered Trading Companies," Working Papers ec7/95, Department of Economics, University of Lancaster.
- Levine, Ross, 2005.
"Finance and Growth: Theory and Evidence,"
Handbook of Economic Growth,
in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934
- Timur Kuran, 2010. "The Scale of Entrepreneurship in Middle Eastern History: Inhibitive Roles of Islamic Institutions," Working Papers 10-14, Duke University, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sarah Carmichael).
If references are entirely missing, you can add them using this form.