Taking the lord's name in vain: The impact of connected directors on 19th century British banks
Autor: | Masami Imai, Richard S. Grossman |
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Rok vydání: | 2016 |
Předmět: |
Economics and Econometrics
History 060106 history of social sciences Parliament Corporate governance media_common.quotation_subject 05 social sciences Equity (finance) Dividend yield Capital gain Financial system 06 humanities and the arts Shareholder 0502 economics and business Equity value 0601 history and archaeology Business 050207 economics Panel data media_common |
Zdroj: | Explorations in Economic History. 59:75-93 |
ISSN: | 0014-4983 |
Popis: | This paper utilizes data on the presence of prominent individuals – that is, those with political (e.g., Members of Parliament) and aristocratic titles (e.g., lords) – on the boards of directors of English and Welsh banks from 1879 to 1909 to investigate whether the appointment of well-connected directors enhanced equity value for bank shareholders. Our analysis of panel data shows that the appointment of connected directors did not increase equity returns (as measured by the capital gain plus dividend yield on bank shares). In fact, we find that the appointment of MPs to directorships had negative effects on bank equity returns. Our event-study analysis corroborates this finding, showing that a bank's shares exhibited negative abnormal returns when their directors were elected to Parliament. Taken together, our results indicate that connected directors yielded little – or even negative – economic payoff to bank shareholders in pre-war Britain. |
Databáze: | OpenAIRE |
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