Working Paper: NBER ID: w17147
Authors: Eric Hilt; Jacqueline Valentine
Abstract: This paper analyzes the early history of corporate shareholding, and its relationship with political change. In the late eighteenth century, corporations were extremely rare and were dominated by elites, but in the early nineteenth century, after American politics became significantly more democratic, corporations proliferated rapidly. Using newly collected data, this paper compares the wealth and status of New York City households who owned corporate stock to the general population there both in 1791, when there were only two corporations in the state, and in 1826, when there were hundreds. The results indicate that although corporate stock was held principally by the city's elite merchants in both periods, share ownership became more widespread over time among less affluent households. In particular, the corporations created in the 1820s were owned and managed by investors who were less wealthy than the stockholders of corporations created in earlier, less democratic periods in the state's history.
Keywords: corporate shareholding; political change; New York City; democratization; economic history
JEL Codes: K22; N21; N41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Political democratization (D72) | Distribution of corporate stock ownership (G34) |
| Political democratization (D72) | Access to corporate shareholding (G34) |
| Democratization of politics (D72) | Diversification of corporate ownership (G34) |
| Corporate stock ownership in 1826 (G34) | Less wealthy investors than in 1791 (G19) |
| Increase in stockholding households from 1791 to 1826 (N93) | Widespread share ownership (D33) |