Konsten att skapa pengar. Aktiebolagens genombrott och finansiell modernisering kring sekelskiftet 1900

Abstract

The joint-stock companies with limited liability have been argued to encourage large-scale risky investments through the structure of residual claims and, at the same time, to minimize the conflict between utility maximization by owners and maximization of the market value of the firm. This entails the importance of studying the incorporation process, in order to fully understand the dynamics of industrialization processes. The aim of this thesis is to analyse the role of joint-stock companies in the Swedish economic development during a period of structural change. Particularly the importance of the incorporation process for the modernization of the Swedish financial market is investigated. The study stretches from the passing of the first joint-stock company law in 1848 to the aftermaths of the 1932 financial crash. In the thesis two approaches are used. Firstly, the development of the legislative framework and the founding of joint-stock companies are analysed from an aggregated level. The main source for this is the archive of the Bureau of Patents- and Registration. Secondly, the role of the incorporation process is studied in individual companies through the analysis of literature and company archives. The constructed time-series of incorporation supports the conclusion that the general breakthrough of joint-stock companies in Sweden could be dated to the first two decades of the 20th century. During this period the use of joint-stock companies rapidly spread to smaller businesses and to all sectors of the economy, especially to enterprises in trade and financial services. The process of incorporation was intertwined with the modernization of the Swedish financial market, as it gave rise to a form of more transferable and impersonal ownership. The study of individual enterprises shows that incorporation was used as a vehicle for economic change, as in the analysis of the venture capital company ‘Finansinstitutet Svenska Värden’; here the endogenous approach to money deepens the understanding of how company financed innovation by engaging in a Schumpeterian process of ‘credit creation’. Furthermore the case study of Finansinstitutet is used to discuss Minsky’s instability hypothesis.