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Path dependence, change and the emergence of the first joint-stock companies

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  • Nicholas Kyriazis
  • Theodore Metaxas

Abstract

This paper presents a model of path dependence and change and focuses on the gaining of new institutional knowledge. The main thesis is that in 'extraordinary' historical situations the possibility of change increases as a result of external pressure and successful adaptation to it. The model is tested applying it to the case study of seventeenth-century United Provinces (Dutch Republic). Such a situation existed in the sixteenth-seventeenth-century United Provinces, due to their uprising against Spanish rule. Because there existed no strong central authority, the decision-makers had to develop new institutions in order to successfully capture the lucrative spice trade from their enemies. The solution was the joint-stock company, which, through the phases of a continuous decision-making procedure, developed into the 'permanent' Dutch East India Company (VOC) in parallel also to the development of the Amsterdam Stock Exchange.

Suggested Citation

  • Nicholas Kyriazis & Theodore Metaxas, 2011. "Path dependence, change and the emergence of the first joint-stock companies," Business History, Taylor & Francis Journals, vol. 53(3), pages 363-374.
  • Handle: RePEc:taf:bushst:v:53:y:2011:i:3:p:363-374
    DOI: 10.1080/00076791.2011.565513
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    References listed on IDEAS

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    1. Charles Hickson & John Turner, 2005. "The Genesis of Corporate Governance: Nineteenth-Century Irish Joint-Stock Banks," Business History, Taylor & Francis Journals, vol. 47(2), pages 174-189.
    2. Nicholas Kyriazis, 2009. "Financing the Athenian state: public choice in the age of Demosthenes," European Journal of Law and Economics, Springer, vol. 27(2), pages 109-127, April.
    3. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    4. George Halkos & Nickolas Kyriazis, 2005. "A Naval Revolution and Institutional Change: The Case of the United Provinces," European Journal of Law and Economics, Springer, vol. 19(1), pages 41-68, January.
    5. David McKeagan, 2009. "Development of a mature securities market in Montreal from 1817 to 1874," Business History, Taylor & Francis Journals, vol. 51(1), pages 59-76.
    6. George Halkos & Nickolas Kyriazis, 2010. "The Athenian economy in the age of Demosthenes: path dependence and change," European Journal of Law and Economics, Springer, vol. 29(3), pages 255-277, June.
    7. Nicholas Kyriazis & Michel Zouboulakis, 2004. "Democracy, Sea Power and Institutional Change: An Economic Analysis of the Athenian Naval Law," European Journal of Law and Economics, Springer, vol. 17(1), pages 117-132, January.
    8. de Vries,Jan & van der Woude,Ad, 1997. "The First Modern Economy," Cambridge Books, Cambridge University Press, number 9780521570619.
    9. Gelderblom, Oscar & Jonker, Joost, 2004. "Completing a Financial Revolution: The Finance of the Dutch East India Trade and the Rise of the Amsterdam Capital Market, 1595 1612," The Journal of Economic History, Cambridge University Press, vol. 64(03), pages 641-672, September.
    10. Mark Freeman & Robin Pearson & James Taylor, 2007. "Technological change and the governance of joint-stock enterprise in the early nineteenth century: The case of coastal shipping," Business History, Taylor & Francis Journals, vol. 49(5), pages 573-594.
    11. de Vries,Jan & van der Woude,Ad, 1997. "The First Modern Economy," Cambridge Books, Cambridge University Press, number 9780521578257.
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    Citations

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    Cited by:

    1. Nicholas Kyriazis & Xenophon Paparrigopoulos, 2014. "War and democracy in ancient Greece," European Journal of Law and Economics, Springer, vol. 38(1), pages 163-183, August.
    2. Militiades N. Georgiou & Nicholas Kyriazis & Emmanouil M. L. Economou, 2015. "Democracy, Political Stability and Economic performance. A Panel Data Analysis," Journal of Risk & Control, Risk Market Journals, vol. 2(1), pages 1-18.
    3. Kyriazis, Nicholas & Metaxas, Theodore, 2012. "War for Profit: Macroculture, Corsairs and partnership companies," MPRA Paper 40926, University Library of Munich, Germany.
    4. Emmanouil Economou & Nicholas Kyriazis & Theodore Metaxas, 2015. "The institutional and economic foundations of regional proto-federations," Economics of Governance, Springer, vol. 16(3), pages 251-271, August.
    5. Amankwah-Amoah, Joseph & Durugbo, Christopher, 2016. "The rise and fall of technology companies: The evolutional phase model of ST-Ericsson's dissolution," Technological Forecasting and Social Change, Elsevier, vol. 102(C), pages 21-33.
    6. Georgiou, Militiades N. & Kyriazis, Nicholas & Economou, Emmanouel/Marios/Lazaros, 2015. "Political Stability and Democratic Governance. A Panel Data Analysis," MPRA Paper 62978, University Library of Munich, Germany.
    7. Economou, Emmanouel/Marios/Lazaros & Kyriazis, Nicholas & Metaxas, Theodore, 2014. "Warfare at sea and profit: Corsairs, institutions and partnership companies," MPRA Paper 58985, University Library of Munich, Germany.

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