This paper proposes to exploit a reform in legal rules of corporate governance to identify contractual incentives from … institutional environment, the reform of the German joint-stock companies act in 1884. We analyze a sample of executive pay for 46 … firms for the years 1870 to 1911. In 1884, a law reform substantially enhanced corporate control, strengthened the …

significantly correlated with productive efficiency, whereas the debt-equity ratio did not influence it. -- Economic history …