Contractual Tradeoffs and Smes Choice of Organizational Form, a View from U.S. And French History, 1830-2000

@article{Lamoreaux2006ContractualTA,
  title={Contractual Tradeoffs and Smes Choice of Organizational Form, a View from U.S. And French History, 1830-2000},
  author={Naomi R. Lamoreaux and Jean‐Laurent Rosenthal},
  journal={ERPN: Other Microeconomic Theory (Sub-Topic)},
  year={2006}
}
Today the vast majority of multi-owner firms in the United States are corporations, but that was not the case in the past. Before the advent of the income tax, tort litigation, and significant federal regulation, entrepreneurs more often than not chose to organize as partnerships, a form that economists consider seriously flawed. Why would they make such a terrible mistake? We begin by noting that corporations created new types of contracting problems for businesses at the same time as they… 
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