Asset Ownership and Incentives in Early Shareholder Capitalism: Liverpool Shipping in the Eighteenth Century
We explore captain-ownership and vessel performance in eighteenth-century transatlantic shipping. Although contingent compensation often aligned incentives between captains and ship owners, one difficult-to-contract hazard was threat of capture during wartime. We exploit variation across time and routes to study the relationship between capture threat and captain-ownership. Vessels were more likely to have captain-owners when undertaking wartime voyages on routes susceptible to privateers.