Skip header navigation
×

Article

Investor behaviour in a nascent capital market: Scottish bank shareholders in the nineteenth century

Citation
Acheson G & Turner JD (2011) Investor behaviour in a nascent capital market: Scottish bank shareholders in the nineteenth century. Economic History Review, 64 (1), pp. 188-213. https://doi.org/10.1111/j.1468-0289.2010.00524.x

Abstract
This article uses the records of nineteenth-century Scottish banks in an attempt to understand investor behaviour in the early British capital market. It presents four main findings, some of which do not conform to the basic assumptions of standard asset pricing theories. First, in an era when efficient portfolio diversification was not possible, the intrinsic risk of an equity security was an important input into investor decision-making. Second, our evidence suggests that businesspeople initially regarded bank stock as a consumption good, as being a stockholder gave them privileged access to bank finance. When bank lending practices changed in the middle of the century, this access-to-credit advantage associated with owning bank stock largely disappeared. Third, investors typically exhibited a bias towards banks that conducted business in the areas where they resided. Fourth, a sizeable proportion of investors were stockholders in more than one bank.

Journal
Economic History Review: Volume 64, Issue 1

StatusPublished
Author(s)Acheson, Graeme; Turner, John D
Publication date28/02/2011
URLhttp://hdl.handle.net/1893/12878
PublisherWiley-Blackwell for Economic History Society
ISSN0013-0117
Scroll back to the top