Financing Growth: New Issues by Australian Firms, 1920–1939

Posted: 4 Dec 2009

See all articles by David Merrett

David Merrett

University of Melbourne

Simon Ville

University of Wollongong - School of Accounting, Economics & Finance

Date Written: December 3, 2009

Abstract

An expanding economy, new technologies, and changing consumer preferences provided growth opportunities for firms in interwar Australia. This period saw an increase in the number of large-scale firms in mining, manufacturing, and a wide range of service industries. Firms unable to rely solely on retained earnings to fund expansion turned to the domestic stock exchanges. A new data set of capital raisings constructed from reports of prospectuses published in the financial press forms the basis for the conclusion that many firms used substantial injections of equity finance to augment internally generated sources of funds. That they were able to do so indicates a strong increase in the capacity of local stock exchanges and a greater willingness of individuals to hold part of their wealth in transferable securities.

Keywords: equity finance, australia, stock exchanges, securities

JEL Classification: N87, N27, G31

Suggested Citation

Merrett, David and Ville, Simon, Financing Growth: New Issues by Australian Firms, 1920–1939 (December 3, 2009). Business History Review, Vol. 83, No. 3, 2009, Available at SSRN: https://ssrn.com/abstract=1517837

David Merrett

University of Melbourne ( email )

185 Pelham Street
Carlton, Victoria 3053
Australia

Simon Ville (Contact Author)

University of Wollongong - School of Accounting, Economics & Finance ( email )

Wollongong, NSW 2522
Australia
+(02) 4221 3098 (Phone)

HOME PAGE: http://www.uow.edu.au/commerce/econ/villes.html

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