IDEAS home Printed from https://ideas.repec.org/p/ems/eureri/32952.html
   My bibliography  Save this paper

The Formative Years of the Modern Corporation: The Dutch East India Company VOC, 1602-1623

Author

Listed:
  • Gelderblom, O.
  • de Jong, A.
  • Jonker, J.

Abstract

With 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.

Suggested Citation

  • Gelderblom, O. & de Jong, A. & Jonker, J., 2012. "The Formative Years of the Modern Corporation: The Dutch East India Company VOC, 1602-1623," ERIM Report Series Research in Management ERS-2012-007-F&A, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:32952
    as

    Download full text from publisher

    File URL: https://repub.eur.nl/pub/32952/ERS-2012-007-FA.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    2. Jones, S. R. H. & Ville, Simon P., 1996. "Efficient Transactors or Rent-Seeking Monopolists? The Rationale for Early Chartered Trading Companies," The Journal of Economic History, Cambridge University Press, vol. 56(04), pages 898-915, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Star Trek and the Economics of the Future (Part II): Programming versus Survival
      by Jason Barr in Skynomics Blog on 2019-02-20 13:04:54
    2. The institutional co-evolution of proto-multinationals
      by stephdeck1 in NEP-HIS blog on 2014-06-10 16:51:24
    3. The institutional co-evolution of proto-multinationals
      by ? in The NEP-HIS Blog on 2014-06-10 17:51:00

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Stephanie Decker & Matthias Kipping & R. Daniel Wadhwani, 2015. "New business histories! Plurality in business history research methods," Business History, Taylor & Francis Journals, vol. 57(1), pages 30-40, January.
    2. Oscar Gelderblom & Joost Jonker, 2013. "Early Capitalism in the Low Countries," Working Papers 0041, Utrecht University, Centre for Global Economic History.
    3. Bogdan-Radu HERZOG, 2022. "The Removal of Economic Barriers in the Process of Social Deconstruction. Legal Precedents Created by Prosbul, the VOC and Loi le Chapelier," International Investment Law Journal, Societatea de Stiinte Juridice si Administrative (Society of Juridical and Administrative Sciences), vol. 2(2), pages 127-136, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oscar Gelderblom & Abe de Jong & Joost Jonker, 2012. "The Formative Years of the Modern Corporation: The Dutch East India Company VOC, 1602-1623," Working Papers 0036, Utrecht University, Centre for Global Economic History.
    2. Gilberto E. Arce & Edgar Robles C., 2005. "Corporate Governance in Costa Rica," Research Department Publications 3218, Inter-American Development Bank, Research Department.
    3. Klapper, Leora F. & Love, Inessa, 2004. "Corporate governance, investor protection, and performance in emerging markets," Journal of Corporate Finance, Elsevier, vol. 10(5), pages 703-728, November.
    4. Fidrmuc, Jana P. & Jacob, Marcus, 2010. "Culture, agency costs, and dividends," Journal of Comparative Economics, Elsevier, vol. 38(3), pages 321-339, September.
    5. Sang Cheol Lee & Mooweon Rhee & Jongchul Yoon, 2018. "Foreign Monitoring and Audit Quality: Evidence from Korea," Sustainability, MDPI, vol. 10(9), pages 1-22, September.
    6. Tarek Roshdy Gebba & Mohamed Gamal Aboelmaged, 2016. "Corporate Governance of UAE Financial Institutions: A Comparative Study between Conventional and Islamic Banks," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 6(5), pages 1-7.
    7. Rym Ayadi & Emrah Arbak & Willem Pieter De Groen, 2012. "Executive Compensation and Risk-taking in European Banking," Chapters, in: James R. Barth & Chen Lin & Clas Wihlborg (ed.), Research Handbook on International Banking and Governance, chapter 8, Edward Elgar Publishing.
    8. Wang, Peipei & Wen, Yuanji & Singh, Harminder, 2017. "The high-volume return premium: Does it exist in the Chinese stock market?," Pacific-Basin Finance Journal, Elsevier, vol. 46(PB), pages 323-336.
    9. Rajesh K. Aggarwal & Andrew A. Samwick, 1999. "Executive Compensation, Strategic Competition, and Relative Performance Evaluation: Theory and Evidence," Journal of Finance, American Finance Association, vol. 54(6), pages 1999-2043, December.
    10. Jongmoo Jay Choi & Hoje Jo & Jimi Kim & Moo Sung Kim, 2018. "Business Groups and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 153(4), pages 931-954, December.
    11. Heinrich, Ralph P., 1999. "Complementarities in Corporate Governance - A Survey of the Literature with Special Emphasis on Japan," Kiel Working Papers 947, Kiel Institute for the World Economy (IfW Kiel).
    12. Karbowski, Adam, 2009. "The corporate governance implications for China," MPRA Paper 73625, University Library of Munich, Germany.
    13. Wei Huang & Hong Zhang & Abhinav Goyal & Jason Laws, 2019. "Internal capital market mergers in weak external market environment: An emerging market evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 24(4), pages 1486-1505, October.
    14. Nadia Saghi-Zedek & Amine Tarazi, 2015. "Droits de contrôle versus droits pécuniaires, crise financière et vulnérabilité des banques européennes," Revue économique, Presses de Sciences-Po, vol. 66(3), pages 527-535.
    15. Gad Jacek, 2020. "The association between disclosures on control system over financial reporting and mechanisms of corporate governance: Empirical evidence from Germany and Poland," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 56(4), pages 351-369, December.
    16. Massimo Colombo & Annalisa Croce & Samuele Murtinu, 2014. "Ownership structure, horizontal agency costs and the performance of high-tech entrepreneurial firms," Small Business Economics, Springer, vol. 42(2), pages 265-282, February.
    17. Hoontaek Seo & Sangho Yi & William McCumber, 2024. "Friendly Boards and the Cost of Debt," JRFM, MDPI, vol. 17(7), pages 1-17, July.
    18. Sergio Destefanis & Vania Sena, 2007. "Patterns of corporate governance and technical efficiency in Italian manufacturing," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 27-40.
    19. Huang, Wei, 2016. "The use of management forecasts to dampen analysts' expectations by Chinese listed firms," International Review of Financial Analysis, Elsevier, vol. 45(C), pages 263-272.
    20. Ribstein Larry E., 2005. "Cross-Listing and Regulatory Competition," Review of Law & Economics, De Gruyter, vol. 1(1), pages 97-148, April.

    More about this item

    Keywords

    Dutch East India Company; VOC;

    JEL classification:

    • F1 - International Economics - - Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ems:eureri:32952. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: RePub The email address of this maintainer does not seem to be valid anymore. Please ask RePub to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/erimanl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.