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.
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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)
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