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The Economic Benefits of Political Connections in Late Victorian Britain

Author

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  • Braggion, F.

    (Tilburg University, Center For Economic Research)

  • Moore, L.

Abstract

The late Victorian era was characterized by close links between politicians and firms in the United Kingdom, with up to half of all members of Parliament serving as company directors. We analyze 467 British companies over the period 1895 to 1904. An analysis of election results shows that the election of a new tech director is associated with a 2 percent to 2.5 percent increase in that firm's share price, whereas old tech firms were unaffected by the electoral fortunes of their directors. New technology firms with political directors were more likely to undertake seasoned issues of both equity and debt.
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Suggested Citation

  • Braggion, F. & Moore, L., 2011. "The Economic Benefits of Political Connections in Late Victorian Britain," Discussion Paper 2011-039, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:0f305e3a-a699-4697-9679-5e07bed051b9
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    More about this item

    Keywords

    Political Connections; Second Industrial Revolution; External Finance;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913

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