Villains or Heroes? Private Banks and Railroads after the Sherman Act

Miguel Cantillo Simon ()
Additional contact information
Miguel Cantillo Simon: Universidad de Costa Rica

No 201701, Working Papers from Universidad de Costa Rica

Abstract: This paper analyzes and measures the value that American private banks added as directors of non financial companies. Using data between 1874 and 1913, and an event study from 1906, I find that bank directors added about 20% of a firm’s market capitalization. Collusive practices encouraged by private banks accounted for 65% of this value, and were the equivalent of creating a three player market among railroads. About 35% of the value added by banks came from better governance. I argue that although policymakers were partly right in sidelining private banks as activist investors, this helped entrench managers.

Keywords: Antitrust; Collusion; Corporate Governance; Financial History (search for similar items in EconPapers)
Pages: 34 pages
Date: 2017-01, Revised 2017-01
New Economics Papers: this item is included in nep-com, nep-his and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://economia.ucr.ac.cr/sites/default/files/202 ... CR%20SDT%2017-01.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fcr:wpaper:201701

Access Statistics for this paper

More papers in Working Papers from Universidad de Costa Rica Contact information at EDIRC.
Bibliographic data for series maintained by Juan Manuel Castro ().