Business Forms and Business Performance in UK Manufacturing 1871-81

We analyse a new dataset of 483 manufacturing firms in 1881 either that employed at least 1000 or had done so a decade earlier. Among these firms the majority were partnerships, but public corporations attained higher capital/ labour ratios and stronger employment growth than other business forms. The divorce of ownership from control was most effective where it was most thoroughly practised, as by public, in contrast to private, corporations. Engineers were frequently encountered in all business forms and associated with expanding employment. But the large public manufacturing corporations employed almost twice the proportion of engineers and professionals in top management as other enterprises. We find that family firms, proxied by heirs, were present in management of three quarters of partnerships but in only one third of public corporations, and did indeed reduce the employment growth of the firm, whereas engineers boosted it by more. Lords, mayors and landed wealth in management were also associated with faster employment growth of enterprises. These results suggest some stereotypes in the literature need to be more precisely defined or seriously questioned.