Abstract: Avoiding ''Negligence and Profusion'': The Failure of the Joint-stock Form in Anglo-Indian Trade, 1813-1870

Michael Aldous


In the nineteenth century, firms operating in the Anglo-India trade were organized using a variety of ownership forms including the partnership, joint-stock company, and a hybrid form known as the managing agency. Faced with both an increasing need for fixed capital to undertake investments into manufacturing facilities and high principal/agent costs due to the distance between owners and managers, the firms adapted and increasingly adopted the hybrid managing agency model to overcome these problems. Organized as partnerships, these firms promoted joint-stock ventures in both the British and Indian capital markets, while providing managerial capabilities to manage activities on the ground. Using new data from Calcutta and Bengal Commercial Registers and detailed case studies of the Assam Company and Gillanders, Arbuthnot and Co., this paper demonstrates that British entrepreneurs did not see the choice of ownership as a dichotomy between the partnership or joint-stock form or firm boundaries as fixed, but instead innovatively drew on the strengths of different forms of ownership to successfully compete and grow.