Abstract: The Character and Denomination of Shares in the Victorian Equity Market

John Turner, Graeme G. Acheson, and Qing Ye


This paper examines the extent to which publicly traded company stocks in nineteenth-century Britain had the following features: high share denominations and high levels of unpaid capital. Using monthly data for the London stock market over the period 1825-1870, the effect of these features on stock returns is then assessed. We find that stocks with unpaid capital earn a higher return, which is consistent with investors being rewarded for the risk of a call on their personal assets. We also find that stocks with a high share denomination earn a lower return, which appears to be consistent with the view that this feature was conducive to superior corporate governance.