The Impact of Limited Liability on Ownership and Control: Irish Banking, 1877-1914

27 Pages Posted: 8 May 2006

See all articles by Graeme Acheson

Graeme Acheson

University of Stirling

John D. Turner

Queen's University Belfast; Queen's University Belfast - Queen's Management School

Abstract

Limited liability is regarded as the sine qua non of the modern company, enabling firms to raise capital from a broad spectrum of investors who have well-diversified portfolios. This article uses the ownership records of an Irish bank, which converted to limited liability in 1883, to explore the impact of introducing limited liability upon ownership and control. We find that ownership becomes more dispersed amongst individuals from a broader social and geographical spectrum. However, there appears to be little impact on portfolio diversification. Furthermore, although limited liability appears to contribute to the rise of the professional director, the evidence suggests that managerial incentives may have been weakened.

Suggested Citation

Acheson, Graeme and Turner, John D., The Impact of Limited Liability on Ownership and Control: Irish Banking, 1877-1914. Economic History Review, Vol. 59, No. 2, pp. 320-346, May 2006, Available at SSRN: https://ssrn.com/abstract=895370 or http://dx.doi.org/10.1111/j.1468-0289.2006.00348.x

Graeme Acheson (Contact Author)

University of Stirling ( email )

Stirling, Scotland FK9 4LA
United Kingdom

John D. Turner

Queen's University Belfast ( email )

David Leir Building
Belfast BT7 1NN, BT9 5AG
Ireland

Queen's University Belfast - Queen's Management School

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

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