NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Publications by Ron Harris

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September 2014Contractual Freedom and the Evolution of Corporate Control in Britain, 1862 to 1929
with Timothy W. Guinnane, Naomi R. Lamoreaux: w20481
British general incorporation law granted companies an extraordinary degree of contractual freedom to craft their own governance rules. In this paper we study the uses to which this flexibility was put by examining the articles of association written by three samples of companies from the late nineteenth and early twentieth centuries. We find that incorporators consistently wrote rules that shifted power from shareholders to directors, that the extent of this shift became greater over time, and that Parliament made little effort to restrain it. Although large firms were less likely to enact the most extreme provisions, such as entrenching specific directors for life, they too wrote articles that gave managers essentially unchecked power. These findings have implications for the literat...
May 2007Putting the Corporation in its Place
with Timothy Guinnane, Naomi R. Lamoreaux, Jean-Laurent Rosenthal: w13109
This article challenges the idea that the corporation is a globally superior form of business organization and that the Anglo-American common-law is more conducive to economic development than the code-based legal systems characteristic of continental Europe. Although the corporation had important advantages over the main alternative form of organization (partnerships), it also had disadvantages that limited its appeal to small- and medium-sized enterprises (SMEs). As a result, when businesses were provided with an intermediate choice, the private limited liability company (PLLC) that combined the advantages of legal personhood and joint stock with a flexible internal organizational structure, most chose not to organize as corporations. This article tracks the changes that occurred in the...

Published: Enterprise Soc (2007) 8 (3): 687-729. doi: 10.1093/es/khm067 First published online: July 19, 2007

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers only

 
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