IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/112145.html
   My bibliography  Save this paper

A colonial cash cow: the return on investments in British Malaya, 1889–1969

Author

Listed:
  • Rönnbäck, Klas
  • Broberg, Oskar
  • Galli, Stefania

Abstract

Historical rates of return on investments have received increasing scholarly attention in recent years. Much literature has focused especially on colonies, where institutions have been argued to facilitate severe exploitation. In the present study, we examine the return on investments in an Asian colony, British Malaya, from 1889 to 1969 for a large sample of companies. Our results suggest that the return on investments in Malaya might have been among the highest in the world during the period studied. Nevertheless, this finding fits badly with theories of imperial exploitation and can only to a limited extent be explained by a higher risk premium. Instead, we argue that the main driver of the very high return on investments in Malaya was rather the substantial rise in global market prices of the output of the two main sectors of the Malayan economy, rubber and tin. The way that the process of decolonization unfolded in Malaya did, furthermore, not lead to any major nationalization of foreign-held assets, and did thereby not disrupt the return on investment in the region in the same way as decolonization did to the return on investment in some other colonies.

Suggested Citation

  • Rönnbäck, Klas & Broberg, Oskar & Galli, Stefania, 2022. "A colonial cash cow: the return on investments in British Malaya, 1889–1969," LSE Research Online Documents on Economics 112145, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:112145
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/112145/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Edelstein, Michael, 1976. "Realized rates of return on U.K. Home and overseas portfolio investment in the age of high imperialism," Explorations in Economic History, Elsevier, vol. 13(3), pages 283-329, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grossman, Richard, 2017. "Stocks for the Long Run: New Monthly Indices of British Equities, 1869-1929," CEPR Discussion Papers 12121, C.E.P.R. Discussion Papers.
    2. Grossman, Richard & Campbell, Gareth & Turner, John, 2019. "Before the Cult of Equity: New Monthly Indices of the British Share Market, 1829-1929," CEPR Discussion Papers 13717, C.E.P.R. Discussion Papers.
    3. Richard S. Grossman, 2015. "Bloody foreigners! Overseas equity on the London Stock Exchange, 1869–1929," Economic History Review, Economic History Society, vol. 68(2), pages 471-521, May.
    4. Richard S.Grossman, 2017. "Beresford’s Revenge: British equity holdings in Latin America, 1869-1929," Wesleyan Economics Working Papers 2017-003, Wesleyan University, Department of Economics.
    5. Richard S.Grossman, 2014. "Bloody Foreigners! Overseas Equity on the London Stock Exchange, 1869-1928," Wesleyan Economics Working Papers 2014-001, Wesleyan University, Department of Economics.
    6. Crafts, Nicholas, 2000. "Development history," Economic History Working Papers 22384, London School of Economics and Political Science, Department of Economic History.
    7. Marianne Pitts, 1998. "Victorian share-pricing - a problem in thin trading," Accounting History Review, Taylor & Francis Journals, vol. 8(1), pages 33-52.
    8. Brian D. Varian, 2023. "Review of periodical literature for 2021: (v) 1850–1945," Economic History Review, Economic History Society, vol. 76(1), pages 367-378, February.
    9. Rota, Mauro & Schettino, Francesco, 2007. "Money and Overseas Investments in the Relative Fall of British Empire," MPRA Paper 6205, University Library of Munich, Germany.
    10. Gareth Campbell & Meeghan Rogers, 2017. "Integration between the London and New York Stock Exchanges, 1825–1925," Economic History Review, Economic History Society, vol. 70(4), pages 1185-1218, November.
    11. Michael A. Clemens & Jeffrey G. Williamson, 2000. "Where did British Foreign Capital Go? Fundamentals, Failures and the Lucas Paradox: 1870-1913," NBER Working Papers 8028, National Bureau of Economic Research, Inc.
    12. Klas Rönnbäck & Oskar Broberg & Stefania Galli, 2022. "A colonial cash cow: the return on investments in British Malaya, 1889–1969," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 16(1), pages 149-173, January.
    13. Kennedy, William & Delargy, Robert, 2000. "Explaining Victorian entrepreneurship: a cultural problem? A market problem? No problem?," Economic History Working Papers 22377, London School of Economics and Political Science, Department of Economic History.
    14. Janette Rutterford & David R. Green & Josephine Maltby & Alastair Owens, 2011. "Who comprised the nation of shareholders? Gender and investment in Great Britain, c. 1870–1935," Economic History Review, Economic History Society, vol. 64(1), pages 157-187, February.
    15. Grossman, Richard, 2017. "Beresford’s Revenge: British equity holdings in Latin America, 1869-1929," CEPR Discussion Papers 12042, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Asia; colonialism; imperialism; Malaya; return on investments; twentieth century;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:112145. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.