An Analysis of the Joint-stock Management System of Shanxi Merchants Centering on Principal-agent Relationship

摘要

The formation of Joint-stock management system of Shanxi Merchants is associated with the historical background of emerging global merchandise exchanges and low degree of commercial competition. This system features in managers' centralized power, investors' infinite liability to customers and permanent employment of the employees. With the development of commodity economy and the intensification of commercial competition, this system should inevitably transform to abolition of permanent employment and adaptation of limited liability system. However, the limitations of rectifying managers' errors greatly hindered Shanxi draft banks' transition to commercial banks, ultimately leading to their collective failure.