Working Paper: NBER ID: w10403
Authors: Eric Hilt
Abstract: In the 1830s, when whaling was a prosperous American industry, a number of whaling corporations were chartered. All of them were short-lived. This paper analyzes the failure of corporations in American whaling, and argues that the corporate form was unable to create the incentives requisite for success in the industry. Most nineteenth-century whaling ventures were owned by a small number of local investors, and were configured to provide powerful incentives for their managers. The effect of the corporate form on productivity is analyzed using a newly-collected panel dataset of 874 whaling voyages. Many whaling corporations were managed by individuals who had previously (or would subsequently) manage ventures with the usual ownership structure. Using an individual-fixed-effects framework, a strong negative effect of the corporate form on productivity is identified.
Keywords: whaling; corporate governance; incentives; productivity
JEL Codes: N5; L2; G3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| corporate form (G30) | productivity (O49) |
| unincorporated partnerships (L39) | productivity (O49) |
| ownership stakes (G32) | productivity (O49) |
| corporate form (G30) | abandonment of enterprises (P31) |
| productivity index of voyages sponsored by corporations (L92) | productivity index of partnerships (J54) |
| selection bias (C24) | productivity differences (O49) |