The Rise and Fall of Bank Control in the United States: 1890-1939
AbstractThis article studies how equity ownership and corporate control were separated in the United States. Initially, railroads and industrial firms were tightly controlled by a few shareholders; this situation was altered in the 1890s by massive mergers and reorganizations, which allowed private banks to control railroads and industrial firms. Between 1912 and 1939, bank control faded away as a result of a political reaction against financial institutions. Using stock market data from 1914, I show that the eviction of banks from corporate boards depressed firm values by about 7 percent, and that part of this value came from cartelization.
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Bibliographic InfoPaper provided by EconWPA in its series Finance with number 9803005.
Date of creation: 23 Mar 1998
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Note: Sent pdf file in binary Revised January 1997.
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Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- G3 - Financial Economics - - Corporate Finance and Governance
- K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
- L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
- N21 - Economic History - - Financial Markets and Institutions - - - U.S.; Canada: Pre-1913
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- Kenichi Ueda, 2006.
"Banks as Coordinators of Economic Growth,"
IMF Working Papers
06/264, International Monetary Fund.
- Ueda, Kenichi, 2013. "Banks as coordinators of economic growth and stability: Microfoundation for macroeconomy with externality," Journal of Economic Theory, Elsevier, vol. 148(1), pages 322-352.
- Josef Schroth, 2012. "Financial Crisis Resolution," 2012 Meeting Papers 617, Society for Economic Dynamics.
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