The asking price of incorporation: State leverage and the evolution of corporate purpose

Fatjon Kaja

No 61, LawFin Working Paper Series from Goethe University, Center for Advanced Studies on the Foundations of Law and Finance (LawFin)

Abstract: This article advances a new perspective on corporate purpose, grounded in the institutional conditions under which corporate privileges are granted. Using a novel dataset of historical UK royal charters and a mixed-methods empirical strategy, the study shows that early corporations articulated specific, enforceable, and public-facing purpose clauses because incorporation was a scarce privilege that allowed the Crown to impose obligations as a "asking price" for the benefits of the corporate form. Machine-learning evidence demonstrates that clauses reflecting Crown leverage cluster systematically and decline over time as incorporation becomes more accessible. The findings reframe corporate purpose not merely as a normative contest among stakeholders but as the product of institutional bargaining at the point of corporate formation, offering a historical lens for contemporary purpose debates.

Keywords: corporate purpose; UK royal charters; text as data; shareholder primacy; historical perspective (search for similar items in EconPapers)
JEL-codes: K00 K2 K22 N80 (search for similar items in EconPapers)
Date: 2026
Note: SAFE Working Paper No. 476
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/342454/1/1970159855.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:lawfin:342454

Access Statistics for this paper

More papers in LawFin Working Paper Series from Goethe University, Center for Advanced Studies on the Foundations of Law and Finance (LawFin) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().