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

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  • Gelderblom, Oscar
  • de Jong, Abe
  • Jonker, Joost

Abstract

With their legal personhood, permanent capital, transferable shares, separation of ownership and management, and limited liability, the Dutch and English colonial trading companies VOC and EIC are considered institutional breakthroughs. We analyze the VOC's business operations and financial policy and show that its novel corporate form owed less to foresight than to piecemeal engineering to remedy design flaws. The crucial feature of managerial limited liability was not, as previously thought, integral to that design, but emerged only after protracted experiments with various solutions to the company's financial bottlenecks. Legal form followed economic function, not the other way around.

Suggested Citation

  • Gelderblom, Oscar & de Jong, Abe & Jonker, Joost, 2013. "The Formative Years of the Modern Corporation: The Dutch East India Company VOC, 1602–1623," The Journal of Economic History, Cambridge University Press, vol. 73(4), pages 1050-1076, December.
    • Handle: RePEc:cup:jechis:v:73:y:2013:i:04:p:1050-1076_00
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    Cited by:

    1. Benjamin Golez & Peter Koudijs, 2014. "Four Centuries of Return Predictability," NBER Working Papers 20814, National Bureau of Economic Research, Inc.
    2. Pieter H.M. RUYS, 2014. "Architecture of an Economy with Social Enterprises: the Relational Capacity Approach," CIRIEC Working Papers 1413, CIRIEC - Université de Liège.
    3. David Le Bris & William N. Goetzmann & Sébastien Pouget, 2015. "The Development of Corporate Governance in Toulouse: 1372-1946," NBER Working Papers 21335, National Bureau of Economic Research, Inc.
    4. Xu Kang, 2024. "Corporate (social) responsibility in state-business relations from the perspective of critical state theory: a historical case of early modern China," International Journal of Corporate Social Responsibility, Springer, vol. 9(1), pages 1-13, December.
    5. Giuseppe Dari-Mattiacci & Oscar Gelderblom & Joost Jonker & Enrico C. Perotti, 2017. "The Emergence of the Corporate Form," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 33(2), pages 193-236.

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