Abstract
There is extensive previous research on the early modern chartered multinational corporations, their development and how they dealt with the various challenges they faced. This article attempts to contribute to this field of research by estimating quantitatively the information lag in early modern multinational enterprise, studying the case of the British Royal African Company and its successor the Company of Merchants Trading to Africa. The results show that the transatlantic information lag decreased somewhat during the second half of the eighteenth century. The decrease was however quite modest, and far less striking than has been claimed in some previous research. During the period, this information lag therefore still posed a major constraint on the development of multinational enterprise.
Notes
1. See for example Flynn and Giraldez, “Path Dependence”; Erikson and Bearman, “Malfeasance and the Foundations”; Inikori “Africa and the Globalisation Process”; Flynn and Giráldez, “Born Again”; Rönnbäck, “Integration of Global Commodity Markets”; Dobado-González, García-Hiernaux, and Guerrero, “The Integration of Grain Markets.”
2. For some key works see for example, Chaudhuri, The English East India Company; Steensgaard, The Asian Trade Revolution; Chaudhuri, The Trading World; Prakash, The Dutch East India Company; Carlos and Nicholas, “Giants of an Earlier Capitalism”; Keay, The Honourable Company; Lawson, The East India Company; Farrington, Trading Places; Erikson and Bearman, “Malfeasance and the Foundation”; Erikson, Between Monopoly and Free Trade.
3. Kupperman, The Atlantic in World History, 98; see also Hancock, “Atlantic Trade,” 334–335; Brown, “The Eighteenth Century,” 40.
4. Banks, Chasing Empire, 67.
5. Bannet, Empire of Letters.
6. Ekberg and Lange, “Business History.”
7. Casson, “Institutional Economics,” 152.
8. See for example Chandler, “Organizational Capabilities” and “Managerial Enterprise”; see also Boyce, “Communication and Contracting.”
9. See for example Anderson, McCormick, and Tollison, “The Economic Organization”; Adams, “Principals and Agents”; Erikson and Bearman, “Malfeasance and the Foundations”; Pearson and Richardson, “Social Capital”; Vlami, “Corporate Identity”; Kyriazis and Metaxas, “Path Dependence”; Seth, “The East India Company”; Vlami and Mandouvalos, “Entrepreneurial Forms”; Sivramkrishna, “From Merchant to Merchant Ruler”; Erikson, Chartering Capitalism.
10. See for example Carlos and Nicholas, “Giants of an Earlier Capitalism”, “Agency Problems” and “Managing the Manager”; Carlos, “Agent Opportunism”, “Principal–Agent Problems” and “Bonding and the Agency Problem”; Carlos and Kruse, “The Decline”; Carlos, Hejeebu, Müller, and Ojala, “Specific Information”; see also discussion initiated by Ville and Jones, “The Principal–Agent Question”; Jones and Ville, “Efficient Transactors” and “Theory and Evidence”; and response by Carlos and Nicholas, “Theory and History”; further contributions from Haggerty, Merely for Money?; Pettigrew, Freedom’s Debt; Norton, “Principal Agent Relations.”
11. Casson, “Institutional Economics”; Carlos and Nicholas, “Giants of an Earlier Capitalism,” 407.
12. Walton, “A Quantitative Study” and “Sources of Productivity”; Shepherd and Walton, Shipping, Figure 5.2; Klein, The Middle Passage, Table 8.8; Morgan, Bristol and the Atlantic Trade, Table .12; Rönnbäck, “The Speed of Ships”; Solar and Rönnbäck, “Copper Sheathing.”
13. Carlos, “Agent Opportunism,” 142 and “Bonding and the Agency Problem,” 314.
14. Müller, “Swedish Consular Reports.”
15. Vinnal, “The World Refuses to Shrink.”
16. Steele, The English Atlantic, Table .1.
17. Ibid., Figure 5.
18. Ibid., 276.
19. McCusker, “The Demise of Distance”; see also Neal, “The Rise of a Financial Press”; McCusker, “Information and Transaction Costs.”
20. Hoag, “The Atlantic Telegraph Cable”; see also Ejrnæs and Persson, “The Gains”; Lampe and Ploeckl, “Spanning the Globe”; Kaukiainen, “Shrinking the World”; Kallioinen, “Information, Communication Technology.”
21. Wilkins, “Multinational Enterprise,”, 57.
22. See for example, Headrick and Griset, “Submarine Telegraph Cables”; Nalbach, “Poisoned at the Source?”; Milne, “British Business and the Telephone”; Lopez-Morell and O’Kean, “A Stable Network.”
23. Davies, The Royal African Company; Pearson and Richardson, “Social Capital.”
24. Based on TSTD2, Transatlantic Slave Trade Database.
25. Own estimates based on TSTD2, Transatlantic Slave Trade Database.
26. For more details on this, see Behrendt, “Markets, Transaction Cycles.”
27. See for example, Kaukiainen, “Shrinking the World,” Table 3.