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The organization of Eastern merchant empires

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  • Rei, Claudia

Abstract

In the sixteenth century, European countries engaged in long-distance trade with the East. Despite sharing the same objectives and technology, Portugal opted for a crown monopoly, England, the Netherlands, and Sweden franchised trade to private merchants, whereas in Denmark and France, king and merchants shared control. The financial condition of the crown appears to have been relevant for the monarchs' decision. I provide an economic mechanism to illuminate the historical variation in terms of the differences in relative endowments of king and merchants within each country. I also explore the implications of control allocation using archival data on labor compensation and shipping technology. Differences in the long run performance of merchant empires suggest a major impact of organization.

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  • Rei, Claudia, 2011. "The organization of Eastern merchant empires," Explorations in Economic History, Elsevier, vol. 48(1), pages 116-135, January.
    • Handle: RePEc:eee:exehis:v:48:y:2011:i:1:p:116-135
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    Cited by:

    1. Claudia Rei, 2011. "Turning Points in Leadership: Shipping Technology in the Portuguese and Dutch Merchant Empires," Vanderbilt University Department of Economics Working Papers 1123, Vanderbilt University Department of Economics.
    2. Rei, Claudia, 2011. "Incentives in Merchant Empires: Portuguese and Dutch Labor Compensation," MPRA Paper 28712, University Library of Munich, Germany.
    3. Claudia Rei, 2013. "Incentives in merchant empires: Portuguese and Dutch compensation schemes," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 7(1), pages 1-13, January.
    4. Arteaga, Fernando & Desierto, Desiree & Koyama, Mark, 2024. "Shipwrecked by rents," Journal of Development Economics, Elsevier, vol. 168(C).
    5. Costa, Leonor Freire & Palma, Nuno & Reis, Jaime, 2013. "The great escape? The contribution of the empire to Portugal’s economic growth, 1500-1800," IFCS - Working Papers in Economic History.WH wp13-07, Universidad Carlos III de Madrid. Instituto Figuerola.

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