When did ownership separate from control?
Subtitle: corporate governance in the early nineteenth century
By: Eric Hilt.
Contributors: National Bureau of Economic Research.
Series: NBER working paper series -- no. 13093.; Working paper series (National Bureau of Economic Research) -- working paper no. 13093.
Publisher: National Bureau of Economic Research
Published: 2007
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 36
Subjects: Stock ownership -- New York (State) -- 19th century -- Mathematical models; Business enterprises -- New York (State) -- 19th century; Corporate governance -- New York (State) -- 19th century
Description: This paper analyzes the ownership and governance of the business corporations of New York State in the 1820s. Using a new dataset collected from the manuscript records of New York's 1823 capital tax, and from the charters of the corporations, I analyze the ownership structures of the firms, and investigate the degree to which ownership was separated from control at the time. In contrast to Berle and Means's account of the development of the corporation, the results indicate that many of the firms were dominated by large shareholders, who were represented on the firms' boards, and held sweeping power to utilize the firms' resources for their own benefit. The oppression of minority shareholders was a significant problem in early corporate governance, and many of the firms configured their voting rights in a way that curtailed the power of large investors. A positive relationship between firm value and these voting rights configurations is found among the publicly-traded firms in the sample.
Notes: "May 2007"

Includes bibliographical references (p. 31-34).

Also available in PDF from the NBER world wide web site (www.nber.org).