The Evolution of the Joint Stock Company to 1800: An Institutional Perspective

Abstract

This article examines the evolution of the English joint stock company during the seventeenth and early eighteenth centuries from an institutional perspective. This period saw the development of the chartered corporation, best exemplified by the East India Company, and later the unincorporated joint stock company. The chartered corporation can be seen as an institution that was largely successful in overcoming the “fundamental problem of exchange”. The unincorporated joint stock company later evolved as the result of the adaption of the chartered corporation model brought about by institutional entrepreneurship. The development of the joint stock company during this period is important because it established the main characteristics and governance structures of the modern corporation.

Keywords: Corporate law history, institutionalism, institutional entrepreneurship, joint stock companies, corporate governance, business organisations, early modern capitalism

JEL Classification: B15, N20