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Dividend policy in Norwegian banking before 1914

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  • Øksendal, Lars Fredrik

Abstract

This article discusses the dividend strategy adopted by Norwegian commercial banks before 1914. Based on a unique data set covering all banks in the period 1882– 1913 as well as six other institutions for the pre-1882 period, I identify the existence of a strong bias towards the payment of high and stable dividends to shareholders. The origins of such bias lie in the specific institutional set-up of commercial banking, the expectations of shareholders and the absence of developed securities markets. Combined with a strong preference for high gearing, this feature contributed to increase the fragility of the Norwegian banking system.

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  • Øksendal, Lars Fredrik, 2011. "Dividend policy in Norwegian banking before 1914," Financial History Review, Cambridge University Press, vol. 18(02), pages 217-241, August.
  • Handle: RePEc:cup:fihrev:v:18:y:2011:i:02:p:217-241_00
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