DONDENA Seminar - Timothy Guinnane
“Using a New Legal Form: The GmbH, 1892-1933”
SPEAKER: Timothy Guinnane (Yale University)
ABSTRACT:
Germany introduced the Gesellschaft mit beschränkter Haftung (GmbH) in 1892 in response to dissatisfaction with the menu of business enterprise forms then available to its entrepreneurs. The GmbH combines some features of the corporation with the flexibility of the partnership, and can be compared to vehicles such as the Limited Liability Company (LLC) popular in the United States today. The new form quickly became popular and is now the most common enterprise form in Germany. In creating this new legal form, the legislator engaged in a rare form of institutional innovation; other enterprise forms such as the partnership and corporation date to at least medieval times. Pre-introduction arguments reflected assumptions about how business firms would use the GmbH. This paper uses a range of archival and published data to compare the predictions to the reality. GmbHs became more popular than most expected, and its creators did not expect its use for both very small and very large enterprises. Critics of the new form exaggerated some practices they viewed as abuses, probably because they relied on specific examples of problem firms rather than comprehensive data. The lower contracting costs implicit in the GmbH led to its wide use in many sectors and sometimes for entirely new purposes.
BIO:
Timothy W. Guinnane is the Philip Golden Bartlett Professor of Economic History, Emeritus, Department of Economics, Yale University. Guinnane’s research focuses on the demographic and financial history of Europe and North America in the nineteenth and twentieth centuries, with special emphasis on Germany. Current projects include the development of company law in the nineteenth century and several projects dealing with German population history.
Please note that to receive the ZOOM link and follow the seminar online, you must subscribe to our mailing list (dondena.research@unibocconi.it).