International business in the First Industrial Revolution

The chapter explores international business during the First Industrial Revolution (1800–1870), focusing on two key organizational forms: multinational trading companies and free-standing companies. These emerged in response to technological and institutional transformations of the global economy. Multinational trading companies, predominantly British, evolved from traditional merchant houses. They expanded globally, intermediating trade and gradually diversifying into shipping, banking, and other sectors. These companies leveraged networks of emigrants and emerging international markets. Free-standing companies were unique international enterprises headquartered in European countries but operating exclusively abroad. They primarily invested in infrastructure, mining, plantations, and utilities in developing regions. Their existence was facilitated by imperial networks, advanced capital markets, and the gold standard. These business models were characterized by their ability to mobilize financial and human capital across global markets. They played a crucial role in Western economic leadership during the “Great Divergence” period, though they would largely disappear or transform by the early 20th century, particularly after First World War.