Why are corporations terminated? A century of evidence from the Netherlands

We identify all 196 Dutch exchange-listed corporations that halted their operations and ceased to exist between 1903 and 1996. We then explain these terminations using unique hand-collected accounting and governance data and regression techniques suited to long-run comparative analysis. Although Dutch bankruptcy laws remained unchanged across the twentieth century, patterns of corporate exit shifted markedly: shareholder-induced voluntary liquidations predominated before WWII, while creditor-driven bankruptcies became the norm thereafter. Our analyses suggest this transformation reflected a broader redefinition of corporate purpose, from a liberal shareholder-centric model before WWII, to a stakeholder-focused paradigm that emerged among Dutch business leaders in the post-war period. We further find that the Dutch government’s industrial policy initiatives in the 1970s did not succeed in reducing corporate failures. Our findings underscore how shifts in corporate purpose can fundamentally reshape business outcomes, even in the absence of formal legal changes.