A New Understanding of the History of Limited Liability: An Invitation for Theoretical Reframing
46 Pages Posted: 23 Aug 2019
Date Written: August 22, 2019
In this paper, I will investigate the historical development of limited liability – widely considered the cornerstone of the business corporation. I challenge the common, linear narratives about how limited liability evolved, and argue that corporations, the stock markets, and the corporate economy enjoyed a long and prosperous history well before limited liability in its modern sense became established. This radically different historical understanding calls for the economic theory of limited liability to be revisited. It also opens up a new set of conceptual, empirical, and theoretical research questions, and points to new possibilities for viable liability regimes in the future.
Keywords: Corporations, Limited Liability, History, Institutions, Organizations, Stock Markets
JEL Classification: N11, N13, N20, N80, K22, B25, G32
Suggested Citation: Suggested Citation