Bloody Foreigners! Overseas Equity on the London Stock Exchange, 1869-1928

Wesleyan Economic Working Paper No. 2014-001

41 Pages Posted: 17 Jan 2014

See all articles by Richard S. Grossman

Richard S. Grossman

Wesleyan University - Economics Department; Institute for Quantitative Social Sciences - Harvard University; Centre for Economic Policy Research

Date Written: January 1, 2014

Abstract

This paper presents data on quantity, capital gains, dividend, and total returns for domestic and overseas equities listed on the London Stock Exchange during 1869-1928. Indices are presented for Africa, Asia, Europe, Latin America, North America, Australia/New Zealand and for the finance, transportation, raw materials, and utilities sectors in each region. Returns and volatility were typically highest in emerging regions and the raw materials sector. Dividend yields were similar across regions and differences in total returns were due largely to disparities in capital gains. Returns of firms in more industrial markets were relatively highly correlated with each other and with developing regions with which they had substantial colonial or trade connections. Contingent liability was most extensively employed where leverage was high and the physical assets were either meager or inaccessible to creditors.

Keywords: Financial Markets, London stock exchange, Investor’s Monthly Manual, long-run stock returns, 19th Century, 20th Century, contingent capital

JEL Classification: G15, N2

Suggested Citation

Grossman, Richard S., Bloody Foreigners! Overseas Equity on the London Stock Exchange, 1869-1928 (January 1, 2014). Wesleyan Economic Working Paper No. 2014-001. Available at SSRN: https://ssrn.com/abstract=2379681 or http://dx.doi.org/10.2139/ssrn.2379681

Richard S. Grossman (Contact Author)

Wesleyan University - Economics Department ( email )

Middletown, CT 06459
United States
(860) 685-2356 (Phone)
(860) 685-2781 (Fax)

HOME PAGE: http://rgrossman.web.wesleyan.edu

Institute for Quantitative Social Sciences - Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Centre for Economic Policy Research ( email )

London
United Kingdom

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