International Speaker Series on China’s Law & Economic Governance
State Building and the Emergence of the Modern Business Corporation
Wednesday, November 25, 2020
08:00pm – 09:00pm | Live on Zoom
Zoom Registration: Please click HERE to reserve a place.
(Prior registration will be required. The Zoom ID will be sent to registrants by email)
Preexisting accounts about the emergence of the modern business corporation come in two varieties: demand-side accounts that largely emphasize the role played by inter-regional trade and commercialization, and supply-side accounts that emphasize the state’s ability to make credible commitments towards protecting corporate assets. While we do not deny that these demand and supply side conditions existed for the emergence of the modern corporation, we argue that they are incomplete in two ways. First, the demand side conditions need to be laid out in more generalized and theoretically abstract terms, in order to capture the modern corporation’s continued appeal in economic contexts that have little to do with long distance trade. Second, and more importantly, preexisting accounts overlook the positive contributions of modern state-building to the corporate form. Modern states also contributed positively to corporate development by supplying the legal and administrative infrastructure necessary to enforce incorporation and investment agreements, so much so that the rise of modern corporations depended—and continues to depend—on modern state building. In particular, it depended on the creation of professionalized judicial systems with strong informational and enforcement capacities. In response to these gaps, we construct, in this talk, a theoretical framework that recognizes a more positive role for the state, while also giving a more systemic account of demand side conditions. Applying it to several major historical legal systems—Chinese, Ottoman, German, English, Dutch, and American—we argue that it does a better job of explaining the general chronology of corporate institutions in early modern and modern history than preexisting theories. The demand and supply side conditions identified in those theories are not discarded, but are instead folded into this model in a more theoretically distilled form.
Angela Zhang, Associate Professor & Director of Centre for Chinese Law, University of Hong Kong
Taisu Zhang, Professor of Law, Yale Law School
John Morley, Professor of Law, Yale Law School
Giuseppe Dari-Mattiacci, Professor of Law and Economics, University of Amsterdam
Jin Li, Professor of of Management and Strategy, University of Hong Kong