Sunday, October 16, 2016: 10:00 AM
This work will look at the adoption of the joint stock company in 19th and 20th century British India. We will compare three groups of businessmen: Hindus, Muslims, and Zoroastrians. We will suggest that success in adoption of the joint stock company depended upon the community's previous institutional background which included its previous business institutions and inheritance laws. Hindus used the Hindu joint family and Hindu inheritance law encouraged capital accumulation. Zoroastrians also used family businesses and had an inheritance scheme which encouraged capital accumulation. (Zoroastrianism originates from ancient Persia and many Zoroastrians migrated from Persia to India in the 7th century.) Muslims, differed from Hindus and Zoroastrians, in that they used partnerships for business and their inheritance law encouraged capital fragmentation. This work will suggest that the use of family businesses and inheritance laws which encouraged capital accumulation allowed for a relatively easy transition into Western style joint stock companies. On the other hand, business who relied exclusively on the partnership model faced difficulties adopting the joint stock company. Thus Muslim businessmen were disadvantaged on two counts: first their business model did not allow for a smooth transition to the joint stock company. Second, their inheritance laws caused division of capital into miniscule fragments. We will look at data from British India and will pay particualr attention to Bombay. We will also look at numerous case studies of families that choose to enter into business during this time period. It will be suggested that adoption of the joint stock company was crucial to a community's business success as business in India during the 20th century became more heavily dependent on joint stock companies rather than traditional institutions. Our study hopes to shed light on the differences in business performance among India's Hindus, Zoroastrians, and Muslims.