THE DECLINE OF THE ROYAL-AFRICAN-COMPANY - FRINGE FIRMS AND THE ROLE OF THE CHARTER

There is no evidence of inefficiency on the part of the Royal African Company which obtained through its charter a legal monopoly of the Eng lish slave trade between the west coast of Africa and the West Indies in 1672. The decline of the Company can be explained, rather, by refer ence to its position as a dominant firm facing a competitive fringe of interlopers or smugglers. Within the context of a dynamic dominant fi rm/competitive fringe model, theory predicts that the optimizing domin ant firm will ultimately lose market share to a competitive fringe and may be pushed out of the market.