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

62 Pages Posted: 24 Jul 2012

See all articles by Oscar Gelderblom

Oscar Gelderblom

Utrecht University

Abe de Jong

Rotterdam School of Management, Erasmus University; Monash University

Joost Jonker

Utrecht University

Date Written: June 23, 2012

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.

Keywords: VOC, Dutch East India Company

JEL Classification: O1, F1, O43

Suggested Citation

Gelderblom, Oscar and de Jong, Abe and Jonker, Joost, The Formative Years of the Modern Corporation: The Dutch East India Company Voc, 1602-1623 (June 23, 2012). ERIM Report Series Reference No. ERS-2012-007-F&A. Available at SSRN: https://ssrn.com/abstract=2116137

Oscar Gelderblom (Contact Author)

Utrecht University ( email )

Vredenburg 138
Utrecht, 3511 BG
Netherlands
+31302536459 (Phone)

Abe De Jong

Rotterdam School of Management, Erasmus University ( email )

P.O. Box 1738
Room T08-25
Rotterdam, 3000 DR
Netherlands
+31 10 408 1022 (Phone)

HOME PAGE: http://https://www.rsm.nl/people/abe-de-jong/

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

Joost Jonker

Utrecht University ( email )

Vredenburg 138
Utrecht, 3511 BG
Netherlands

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