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‘Veritable gold mines before the arrival of railway competition’: but did dividends signal rates of return in the English canal industry?

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  • A. J. ARNOLD
  • S. McCARTNEY

Abstract

Dividends can provide a tangible signal of earnings, but this function depends upon characteristics of financial reporting that were not always present in early financial capitalism. Although eighteenth-century English canal companies offered low‐risk securitized capital approved by Parliament and were important to the development of financial capitalism, little is known about the economic state of the canal industry, beyond observed dividend levels. This article estimates rates of return on equity for a set of major English canals, but shows that their financial reporting under‐represented equity inputs so that dividend rates did not reliably signal operating returns or equity‐based rates of return.

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  • A. J. ARNOLD & S. McCARTNEY, 2011. "‘Veritable gold mines before the arrival of railway competition’: but did dividends signal rates of return in the English canal industry?," Economic History Review, Economic History Society, vol. 64(1), pages 214-236, February.
    • Handle: RePEc:bla:ehsrev:v:64:y:2011:i:1:p:214-236
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    File URL: http://hdl.handle.net/10.1111/j.1468-0289.2010.00541.x
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    References listed on IDEAS

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    Cited by:

    1. Dan Bogart, 2013. "The Transportation Revolution in Industrializing Britain: A Survey," Working Papers 121306, University of California-Irvine, Department of Economics.
    2. Valerio Antonelli & Raffaele D?Alessio & Emanuela Mattia Cafaro & Michele Bigoni, 2019. "The Pope and the Train: Financial Reporting Practices in the Railroad Companies of the Papal States (1846-1870)," CONTABILIT? E CULTURA AZIENDALE, FrancoAngeli Editore, vol. 0(2), pages 7-34.
    3. Amanda Gregg & Steven Nafziger, 2019. "Capital structure and corporate performance in late Imperial Russia," European Review of Economic History, European Historical Economics Society, vol. 23(4), pages 446-481.
    4. Yang Hu & Les Oxley, 2017. "Exuberance in British Share Prices during the Railway Mania of the 1840s: Evidence from the Phillips, Shi and Yu Test," Working Papers in Economics 17/09, University of Waikato.
    5. Dan Bogart, 2012. "Profiting from Public Works: Financial Returns to Infrastructure and Investment Strategies during Britain's Industrial Revolution," Working Papers 121304, University of California-Irvine, Department of Economics.

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