The Course of the Exchange: Measuring and Interpreting Returns Process in 18th and Early 19th Century Britain

Gary S Shea

CRIEFF Discussion Papers from Centre for Research into Industry, Enterprise, Finance and the Firm

Abstract: As an introduction to a new database, this paper demonstrates some aspects of returns processes on equity share capital in the earliest companies publicly traded in Britain. Based upon not a sample, but the near universe of all publicly traded companies for which data are available for the period 1690-1834, the characteristics analysed are both cross-sectional and intertemporal. From the point of view of significant research questions in both economic history and financial economics the following analyses are presented. The largest returns to shareholders in the 'great moneyed companies' who financed the reorganisation of the National Debt in the middle of the 18th Century were actually realised in the earliest years in the formation of these companies - the early 18th Century. Similarly, the largest returns to investors in the large transportation improvments (canals and docks in particular) that preceded the Industrial Revolution were actually realised before the Industial Revolution occured. The measured 18th Century equity premium is assuredly smaller than its more modern equivalents and cannot be much more than 4% per annum.

JEL-codes: G12 N23 (search for similar items in EconPapers)
Date: 2000-02
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Persistent link: https://EconPapers.repec.org/RePEc:san:crieff:0022

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