Private contracting, law and finance

Graeme G Acheson, Gareth Campbell, John D Turner

Research output: Contribution to journalArticle

Abstract

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.
Original languageEnglish
Pages (from-to)4156-4195
Number of pages40
JournalThe Review of Financial Studies
Volume32
Issue number11
Early online date14 Feb 2019
DOIs
Publication statusPublished - 30 Nov 2019

Fingerprint

Contracting
Shareholders
Law and finance
Corporate law
Shareholder protection
Concentrated ownership
Financial markets

Keywords

  • financial policy
  • financial risk
  • risk management
  • capital
  • ownership structure
  • mergers

Cite this

Acheson, G. G., Campbell, G., & Turner, J. D. (2019). Private contracting, law and finance. The Review of Financial Studies, 32(11), 4156-4195. https://doi.org/10.1093/rfs/hhz020
Acheson, Graeme G ; Campbell, Gareth ; Turner, John D. / Private contracting, law and finance. In: The Review of Financial Studies. 2019 ; Vol. 32, No. 11. pp. 4156-4195.
@article{63d01207161a461d9f99b1572d138787,
title = "Private contracting, law and finance",
abstract = "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.",
keywords = "financial policy, financial risk, risk management, capital, ownership structure, mergers",
author = "Acheson, {Graeme G} and Gareth Campbell and Turner, {John D}",
year = "2019",
month = "11",
day = "30",
doi = "10.1093/rfs/hhz020",
language = "English",
volume = "32",
pages = "4156--4195",
number = "11",

}

Acheson, GG, Campbell, G & Turner, JD 2019, 'Private contracting, law and finance', The Review of Financial Studies, vol. 32, no. 11, pp. 4156-4195. https://doi.org/10.1093/rfs/hhz020

Private contracting, law and finance. / Acheson, Graeme G; Campbell, Gareth; Turner, John D.

In: The Review of Financial Studies, Vol. 32, No. 11, 30.11.2019, p. 4156-4195.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Private contracting, law and finance

AU - Acheson, Graeme G

AU - Campbell, Gareth

AU - Turner, John D

PY - 2019/11/30

Y1 - 2019/11/30

N2 - 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.

AB - 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.

KW - financial policy

KW - financial risk

KW - risk management

KW - capital

KW - ownership structure

KW - mergers

U2 - 10.1093/rfs/hhz020

DO - 10.1093/rfs/hhz020

M3 - Article

VL - 32

SP - 4156

EP - 4195

IS - 11

ER -

Acheson GG, Campbell G, Turner JD. Private contracting, law and finance. The Review of Financial Studies. 2019 Nov 30;32(11):4156-4195. https://doi.org/10.1093/rfs/hhz020