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http://ssrn.com/abstract=1071007
 
 

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Ownership and Control in the Entrepreneurial Firm: An International History of Private Limited Companies


Timothy W. Guinnane


Yale University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Ron Harris


Tel Aviv University - Buchmann Faculty of Law

Naomi R. Lamoreaux


Yale University; University of California, Los Angeles (UCLA) - Department of Economics; National Bureau of Economic Research (NBER)

Jean-Laurent Rosenthal


University of California, Los Angeles (UCLA) - Department of Economics

December 2007

Yale University Economic Growth Center Discussion Paper No. 959

Abstract:     
We use the history of private limited liability companies (PLLCs) to challenge two pervasive assumptions in the literature: (1) Anglo-American legal institutions were better for economic development than continental Europe's civil-law institutions; and (2) the corporation was the superior form of business organization. Data on the number and types of firms organized in France, Germany, the UK, and the US show that that the PLLC became the form of choice for small- and medium-size enterprises wherever and whenever it was introduced. The PLLC's key advantage was its flexible internal governance rules that allowed its users to limit the threat of untimely dissolution inherent in partnerships without taking on the full danger of minority oppression that the corporation entailed. The PLLC was first successfully introduced in Germany, a code country, in 1892. Great Britain, a common-law country followed in 1907, and France, a code country, in 1925. The laggard was the US, a common-law country whose courts had effectively killed earlier attempts to enact the form.

Number of Pages in PDF File: 63

Keywords: limited company, partnership, corporation, legal regime, common law, civil law

JEL Classification: N8, G3, O16, K22

working papers series


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Date posted: December 13, 2007  

Suggested Citation

Guinnane, Timothy W. and Harris, Ron and Lamoreaux, Naomi R. and Rosenthal, Jean-Laurent, Ownership and Control in the Entrepreneurial Firm: An International History of Private Limited Companies (December 2007). Yale University Economic Growth Center Discussion Paper No. 959. Available at SSRN: http://ssrn.com/abstract=1071007

Contact Information

Timothy W. Guinnane (Contact Author)
Yale University - Department of Economics ( email )
28 Hillhouse Ave
New Haven, CT 06520-8268
United States
(203) 432-3616 (Phone)
(203) 432-3898 (Fax)
HOME PAGE: http://pantheon.yale.edu/~guinnane
CESifo (Center for Economic Studies and Ifo Institute)
Poschinger Str. 5
Munich, DE-81679
Germany
Ron Harris
Tel Aviv University - Buchmann Faculty of Law ( email )
Ramat Aviv
Tel Aviv 69978, IL
Israel
972 3 6408798 (Phone)
972 3 6407260 (Fax)
HOME PAGE: http://www2.tau.ac.il/Person/law/researcher.asp?id=agihecicf
Naomi R. Lamoreaux
Yale University ( email )
27 Hillhouse
New Haven, CT 06520
United States
2034323625 (Phone)
2034323635 (Fax)
HOME PAGE: http://www.econ.yale.edu/faculty1/lamoreaux.htm
University of California, Los Angeles (UCLA) - Department of Economics ( email )
Box 951477
Los Angeles, CA 90095-1477
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Jean-Laurent Rosenthal
University of California, Los Angeles (UCLA) - Department of Economics ( email )
Box 951477
Los Angeles, CA 90095-1477
United States
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