The Development of Corporate Governance in Toulouse: 1372-1946

59 Pages Posted: 13 Jul 2015

See all articles by David Le Bris

David Le Bris

Toulouse Business School

William N. Goetzmann

Yale School of Management - International Center for Finance; National Bureau of Economic Research (NBER)

Sebastien Pouget

Toulouse School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 2015

Abstract

We document a sequence of institutional innovations associated with the corporate form over the course of several centuries in Toulouse. Shareholding companies that began in the 11th century formally incorporated themselves into two large-scale, widely held firms by 1373. In the years that followed they experienced the economic challenges and conflicts we now recognize as inherent in the separation of ownership and control. Using new and existing archival research, we show how the Toulouse firms developed institutional solutions including tradable shares, limited liability, governing boards, cash payout policies, external audits, shareholder meetings and mechanisms for re-capitalization. We examine these developments in the context of institutional economic theory and the received history of the corporation. The Toulouse companies preceded the birth of the Dutch and English East India companies by centuries. The Toulouse firms shed light on the necessary and sufficient conditions for the development of the corporate form. We show that the constellation of features associated with the corporation can appear in situations of relative economic certainty and in the context of Medieval legal code that did not require the granting of governmental approval or patent. The Toulouse firms are a unique case in which the corporation appears as a nexus of private contracts.

Suggested Citation

Le Bris, David and Goetzmann, William N. and Pouget, Sebastien, The Development of Corporate Governance in Toulouse: 1372-1946 (July 2015). NBER Working Paper No. w21335. Available at SSRN: https://ssrn.com/abstract=2629940

David Le Bris (Contact Author)

Toulouse Business School ( email )

20, bd Lascrosses
Toulouse, 31068
France

William N. Goetzmann

Yale School of Management - International Center for Finance ( email )

165 Whitney Ave.
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-432-5950 (Phone)
203-436-9252 (Fax)

HOME PAGE: http://viking.som.yale.edu

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Sebastien Pouget

Toulouse School of Economics ( email )

21 allée de Brienne
31015 Toulouse Cedex 6
France

Register to save articles to
your library

Register

Paper statistics

Downloads
8
Abstract Views
238
PlumX Metrics