Substitutes for Legal Protection: Corporate Governance and Dividends in Victorian Britain

Economic History Review (2011) vol 64, no. 2, pp. 571-597

45 Pages Posted: 6 Jan 2015

See all articles by Gareth Campbell

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: January 1, 2011

Abstract

Companies in Victorian Britain operated in a laissez-faire legal environment from the perspective of outside investors, implying that such investors were not protected by the legal system. This paper seeks to identify the alternative mechanisms which outside shareholders used to protect themselves by examining the dividend policy and governance of over 800 publicly-traded companies at the beginning of the 1880s. We assess the importance of these mechanisms by estimating their impact on Tobin’s Q. Our evidence suggests that dividends and well-structured and incentivised boards of directors may have played a role in protecting the interests of outside investors.

Suggested Citation

Campbell, Gareth and Turner, John D., Substitutes for Legal Protection: Corporate Governance and Dividends in Victorian Britain (January 1, 2011). Economic History Review (2011) vol 64, no. 2, pp. 571-597, Available at SSRN: https://ssrn.com/abstract=2545233

Gareth Campbell (Contact Author)

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

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
35
Abstract Views
906
PlumX Metrics