Private Contracting, Law and Finance

Review of Financial Studies, Forthcoming

QMS Research Paper 2019/05

60 Pages Posted: 18 Mar 2019

See all articles by Graeme Acheson

Graeme Acheson

University of Stirling

Gareth Campbell

Queen's University Belfast - Queen's Management School; Queen's University Belfast

John D. Turner

Queen's University Belfast; Queen's University Belfast - Queen's Management School

Date Written: February 26, 2019

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 circa 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 which were subsequently included in statutory corporate law. We also find that companies offering better protection to shareholders had less concentrated ownership.

Keywords: Law and finance, ADRI, shareholder protection, corporate ownership, common law

JEL Classification: G32, G34, G38, K22, N23, N43, N83

Suggested Citation

Acheson, Graeme and Campbell, Gareth and Turner, John D., Private Contracting, Law and Finance (February 26, 2019). Review of Financial Studies, Forthcoming; QMS Research Paper 2019/05. Available at SSRN: https://ssrn.com/abstract=3342312 or http://dx.doi.org/10.2139/ssrn.3342312

Graeme Acheson (Contact Author)

University of Stirling ( email )

Stirling, Scotland FK9 4LA
United Kingdom

Gareth Campbell

Queen's University Belfast - Queen's Management School

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

Queen's University Belfast ( email )

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

John D. Turner

Queen's University Belfast ( email )

David Leir Building
Belfast BT7 1NN, BT9 5AG
Ireland

Queen's University Belfast - Queen's Management School

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

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