Logo

World Elite Journal Articles

Why Did Shareholder Liability Disappear?
Journal of Financial Economics, 2024

Bogle, David A.; Campbell, Gareth; Coyle, Christopher; Turner, John D. Why did shareholder liability disappear? We address this question by looking at its use by British insurance companies until its complete disappearance. We explore three possible explanations for its demise: (1) regulation and government-provided policyholder protection meant that it was no longer required; (2) it had become de facto limited; and (3) shareholders saw an opportunity to expunge something they disliked when insurance companies grew in size. Using hand-collected archival data, our findings suggest investors attached a risk premium to companies with shareholder liability, and it was phased out as insurance companies expanded, which meant that they were better able to pool risks.

Private Contracting, Law and Finance
Review of Financial Studies, 2019

Acheson, Graeme G.; Campbell, Gareth; Turner, John D. In the late nineteenth century Britain had almost no mandatory shareholder protections, but had very developed financial markets. We argue that private contracting between shareholders and corporations meant that the absence of statutory protections was immaterial. Using approximately 500 articles of association from before 1900, we code the protections offered to shareholders in these private contracts. We find that firms voluntarily offered shareholders many of the protections that were subsequently included in statutory corporate law. We also find that companies offering better protection to shareholders had less concentrated ownership.

Infographics by Topic

Menu

  • Home
  • Recent
    • 2024: Why Did Shareholder Liability Disappear?
    • 2022: Business Creation and Political Turmoil: Ireland versus Scotland before 1900
    • 2021: Before the Cult of Equity: The British Stock Market, 1829-1929
    • 2021: Independent Women: Investing in British Railways, 1870-1922
    • 2020: From Complementary to Competitive: The London and U.K. Provincial Stock Markets
  • World Elite Journals
    • 2024: Why Did Shareholder Liability Disappear?
    • 2019: Private Contracting, Law and Finance
  • Corporate Finance
    • 2024: Why Did Shareholder Liability Disappear?
    • 2022: Business Creation and Political Turmoil: Ireland versus Scotland before 1900
    • 2019: Private Contracting, Law and Finance
    • 2018: Capital Structure Volatility in Europe
    • 2017: Who Financed the Expansion of the Equity Market? Shareholder Clienteles in Victorian Britain
    • 2016: Corporate Ownership, Control, and Firm Performance in Victorian Britain
    • 2015: Active Controllers or Wealthy Rentiers? Large Shareholders in Victorian Public Companies
    • 2015: Managerial Failure in Mid-Victorian Britain? Corporate Expansion during a Promotion Boom
    • 2015: Corporate Ownership and Control in Victorian Britain
    • 2014: Government Policy during the British Railway Mania and the 1847 Commercial Crisis
    • 2012: Dispelling the Myth of the Naive Investor during the British Railway Mania, 1845-1846
    • 2011: Substitutes for Legal Protection: Corporate Finance and Dividends in Victorian Britain
  • Asset Pricing
    • 2021: Before the Cult of Equity: The British Stock Market, 1829-1929
    • 2021: Independent Women: Investing in British Railways, 1870-1922
    • 2020: From Complementary to Competitive: The London and U.K. Provincial Stock Markets
    • 2018: The Liquidity of the London Capital Markets, 1825-70
    • 2018: What Moved Share Prices in the Nineteenth-Century London Stock Market?
    • 2017: Integration between the London and New York Stock Exchanges, 1825-1925
    • 2016: This Time Is Different: Causes and Consequences of British Banking Instability over the Long Run
    • 2013: Deriving the Railway Mania
    • 2012: The Role of the Media in a Bubble
    • 2012: Myopic Rationality in a Mania
  • Search