Share portfolios in the early years of financial capitalism
London, 1690-1730
Bibliographic Data
| ID | 3552480 |
|---|---|
| Authors | Ann M Carlos (University of Colorado), Erin Fletcher (Lafayette College), Erin K Fletcher (0000-0002-2804-6890, Lafayette College), Larry Neal (University of Illinois Urbana-Champaign, corresponding author) |
| Year | 2015 |
| Volume | 68 |
| Issue | 2 |
| Pages | 574-599 |
| Publication date | 2015-05-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic History Review (JOURNAL) |
| Journal identifiers | ISSN: 0013-0117 • E-ISSN: 1468-0289 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1111/ehr.12069 |
| OpenAlex | W2152584553 |
| Language | EN |
| Citations received | 9 |
| References cited | 37 |
The dramatic expansion of public and private financial markets in the aftermath of the Glorious Revolution has received extensive attention. Despite this, little is known about how ordinary individual investors managed risk within this framework. Using a newly constructed dataset of share ownership for those joint-stock companies listed in the financial press of the day, we reconstruct individual portfolio holdings for investors in these companies. We examine individual portfolio holdings first for the decade after the Glorious Revolution and then for the years around the South Sea Bubble. Despite a fivefold increase in the number of unique individuals in the market between the 1690s and the 1720s, we find that in each period roughly 80 per cent of those active in the equity market held shares in only one company, even though many shareholders had the capacity or wealth to diversify share portfolios. These outcomes suggest diversification against idiosyncratic liquidity risk. Overall, however, there is limited evidence that individuals were using their financial portfolios to protect against diversifiable shocks. For many, we argue, company-specific voting and firm governance rules drove market activity
Business · Common stock · Corporate governance · Diversification (marketing strategy) · Economics · Equity (law) · Financial market · Financial system · Market liquidity · Monetary economics · Portfolio · Shareholder · Stock market · Systematic risk · Voting · Finance · Financial Markets and Investment Strategies · Historical Economic and Social Studies · Housing Market and Economics
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| Unique citing works | 9 |
|---|---|
| Citations per year | 1,13 |
| Citation span | 2018 - 2023 (6) |
| Citation velocity | historical |
| Highly cited | No |
| Citation types | Neutral: 9 |