Choice of Enterprise Form: Spain, 1886-1936
64 Pages Posted: 30 Jun 2015 Last revised: 14 Jul 2015
Date Written: June 2015
Abstract
Economists have long neglected study of an important contractual decision, a firm’s choice of legal form. Enterprise form shapes the relations among a firm’s owners as well as many features of a firm’s interactions with the rest of the economy. Using unusual firm-level data on Spain 1886-1936, we estimate nested logit models of the determinants of enterprise form choice. In 1919, Spain introduced a new enterprise form that compromised between partnerships and corporations, and displaced larger partnerships and smaller corporations. This Sociedad de Responsabilidad Limitada was especially important for small and median-sized enterprises whose owners were not related.
Keywords: Law and finance, law and economics, legal form of enterprise, Spanish economic history, limited partnership, limited-liability company
JEL Classification: K20, N43, N44
Suggested Citation: Suggested Citation