Much Ado About Nothing: The Limitation of Liability and the Market for 19th century Irish Bank Stock

Abstract Limited liability is widely believed to be a prerequisite for the emergence of an active and liquid securities market because the transactions costs associated with trading ownership of unlimited liability firms are viewed as prohibitive. In this article, we examine the trading of shares in an Irish bank, which limited its liability in 1883. Using this bank’s archives, we assemble a time series of trading data, which we test for structural breaks. Our results suggest that the move to limited liability had a negligible impact upon the trading of this bank’s shares.

The Trading of Unlimited Liability Bank Shares in Nineteenth Century Ireland: The Bagehot Hypothesis

In the mid-1820s, banks became the first businesses in Great Britain and Ireland to be allowed to form freely on an unlimited liability joint-stock basis. Walter Bagehot warned that their shares would ultimately be owned by widows, orphans, and other impecunious individuals. Another hypothesis is that the governing bodies of these banks, constrained by special legal restrictions on share trading, acted effectively to prevent such shares being transferred to the less wealthy. We test both conjectures using the archives of an Irish joint-stock bank. The results do not support Bagehot's hypothesis.

Organizational and financial transparency in the website of the foundations: an empirical study for Spain

Transparency in nonprofit sector and foundations, as an element to enhance the confidence of stakeholders in the organization, is a fact shown by several studies in recent decades. Transparency can be considered in various fields and through different channels. In our study we focused on the analysis of the organizational and economic transparency of foundations, shown through the voluntary information on their Website. We review the theoretical previous studies published to put to the foundations within the framework of the social economy. This theoretical framework has focused on accountability that make foundations in relation to its social function and its management, especially since the most recent focus of information transparency across the Website.In this theoretical framework was made an index to quantify the voluntary information which is shown on its website. This index has been developed ad hoc for this study and applied to a group of large corporate foundations.With the application of these data are obtained two kind of results, to a descriptive level and to a inferential level.We analyzed the statistical correlation between economic transparency and organizational transparency offered in the Website through quantified variables by a multiple linear regression. This empirical analysis allows us to draw conclusions about the level of transparency offered by these organizations in relation to their organizational and financial information, as well as explain the relation between them.

Cooperativism, entrepreneurship and economic development: a linking theoretical model

Cooperatives, as a kind of firms, are considered by many scholars as an remarkable alternative for overcoming the economic crisis started in 2008. Besides, there are other scholars which pointed out the important role that these firms play in the regional economic development. Nevertheless, when one examines the economic literature on cooperatives, it is detected that this kind of firms is mainly studied starting from the point of view of their own characteristics and particularities of participation and solidarity. In this sense, following a different analysis framework, this article proposes a theoretical model in order to explain the behavior of cooperatives based on the entrepreneurship theory with the aim of increasing the knowledge about this kind of firms and, more specifically, their contribution to regional economic development.

Wider share ownership?: investors in English and Welsh Bank shares in the nineteenth century

The joint-stock banks that established after the liberalizing legislation of 1826 were periodically criticized during the nineteenth century for their low-quality and rapidly deteriorating shareholder constituencies. The quality of a bank's shareholding constituency was of paramount importance because of unlimited shareholder liability. Using archival records, this article examines the quality of bank shareholder constituencies over the nineteenth century. The main finding is that shareholder constituencies did not deteriorate in quality until the introduction of limited liability. The non-deterioration of constituencies is attributed to bank deeds which locked in the aggregate quality of shareholder constituencies by empowering directors to vet all share transfers.

The death blow to unlimited liability in Victorian Britain: The City of Glasgow failure

In 1878, one of Britain's largest banks, the City of Glasgow Bank, collapsed, leaving a huge deficit between its assets and liabilities. As this bank, similar to many other contemporary British banks, had unlimited liability, its failure was accompanied by the bankruptcy of the vast majority of its stockholders. It is generally believed that the collapse of this depository institution revealed the extent to which ownership in large joint-stock banks had been diffused to investors of very modest means. It is also believed that the failure resulted in bank shareholders dumping their shares unto the market. Our evidence, garnered from ownership records, trading data, and stock prices, offers no support for these widely held beliefs. © 2007 Elsevier Inc. All rights reserved.

TESTING FOR STATIONARITY IN HETEROGENEOUS PANEL DATA IN THE CASE OF MODEL MISSPECIFICATION

This paper investigates the performance of the tests proposed by Hadri and by Hadri and Larsson for testing for stationarity in heterogeneous panel data under model misspecification. The panel tests are based on the well known KPSS test (cf. Kwiatkowski et al.) which considers two models: stationarity around a deterministic level and stationarity around a deterministic trend. There is no study, as far as we know, on the statistical properties of the test when the wrong model is used. We also consider the case of the simultaneous presence of the two types of models in a panel. We employ two asymptotics: joint asymptotic, T, N -> infinity simultaneously, and T fixed and N allowed to grow indefinitely. We use Monte Carlo experiments to investigate the effects of misspecification in sample sizes usually used in practice. The results indicate that the assumption that T is fixed rather than asymptotic leads to tests that have less size distortions, particularly for relatively small T with large N panels (micro-panels) than the tests derived under the joint asymptotics. We also find that choosing a deterministic trend when a deterministic level is true does not significantly affect the properties of the test. But, choosing a deterministic level when a deterministic trend is true leads to extreme over-rejections. Therefore, when unsure about which model has generated the data, it is suggested to use the model with a trend. We also propose a new statistic for testing for stationarity in mixed panel data where the mixture is known. The performance of this new test is very good for both cases of T asymptotic and T fixed. The statistic for T asymptotic is slightly undersized when T is very small (

Rule Britannia!: British Stock Market Returns, 1825-1870

This article presents a new series of monthly equity returns for the British stock market for the period 1825-1870. In addition to calculating capital appreciation and dividend yields, the article also estimates the effect of survivorship bias on returns. Three notable findings emerge from this study. First, stock market returns in the 1825-1870 period are broadly similar for Britain and the United States, although the British market is less risky. Second, real returns in the 1825-1870 period are higher than in subsequent epochs of British history. Third, unlike the modern era, dividends are the most important component of returns.

The rate of return on equity across industrial sectors on the British stock market, 1825-70

This article assesses the contribution of the various industrial sectors to the growth of the British equity market in the 1825–70 period. It also provides estimates of the rates of return on these industrial sectors in this period. The article then proceeds to examine whether differences in rates of return across the various sectors can be explained by risk or other financial factors. One of the main findings is that the relatively high rates of return in the banking, insurance, and miscellaneous sectors appear to be in some measure explained by the presence of extended liability and uncalled capital.

A probabilistic modelling scheme for analysis of long-term failure of cemented femoral joint replacements

Reliable prediction of long-term medical device performance using computer simulation requires consideration of variability in surgical procedure, as well as patient-specific factors. However, even deterministic simulation of long-term failure processes for such devices is time and resource consuming so that including variability can lead to excessive time to achieve useful predictions. This study investigates the use of an accelerated probabilistic framework for predicting the likely performance envelope of a device and applies it to femoral prosthesis loosening in cemented hip arthroplasty.
A creep and fatigue damage failure model for bone cement, in conjunction with an interfacial fatigue model for the implant–cement interface, was used to simulate loosening of a prosthesis within a cement mantle. A deterministic set of trial simulations was used to account for variability of a set of surgical and patient factors, and a response surface method was used to perform and accelerate a Monte Carlo simulation to achieve an estimate of the likely range of prosthesis loosening. The proposed framework was used to conceptually investigate the influence of prosthesis selection and surgical placement on prosthesis migration.
Results demonstrate that the response surface method is capable of dramatically reducing the time to achieve convergence in mean and variance of predicted response variables. A critical requirement for realistic predictions is the size and quality of the initial training dataset used to generate the response surface and further work is required to determine the recommendations for a minimum number of initial trials. Results of this conceptual application predicted that loosening was sensitive to the implant size and femoral width. Furthermore, different rankings of implant performance were predicted when only individual simulations (e.g. an average condition) were used to rank implants, compared with when stochastic simulations were used. In conclusion, the proposed framework provides a viable approach to predicting realistic ranges of loosening behaviour for orthopaedic implants in reduced timeframes compared with conventional Monte Carlo simulations.

Social Class Variation in Risk: A Comparative Analysis of the Dynamics of Economic Vulnerability

A joint concern with multidimensionality and dynamics is a defining feature of the pervasive use of the terminology of social exclusion in the European Union. The notion of social exclusion focuses attention on economic vulnerability in the sense of exposure to risk and uncertainty. Sociological concern with these issues has been associated with the thesis that risk and uncertainty have become more pervasive and extend substantially beyond the working class. This paper combines features of recent approaches to statistical modelling of poverty dynamics and multidimensional deprivation in order to develop our understanding of the dynamics of economic vulnerability. An analysis involving nine countries and covering the first five waves of the European Community Household Panel shows that, across nations and time, it is possible to identify an economically vulnerable class. This class is characterized by heightened risk of falling below a critical resource level, exposure to material deprivation and experience of subjective economic stress. Cross-national differentials in persistence of vulnerability are wider than in the case of income poverty and less affected by measurement error. Economic vulnerability profiles vary across welfare regimes in a manner broadly consistent with our expectations. Variation in the impact of social class within and across countries provides no support for the argument that its role in structuring such risk has become much less important. Our findings suggest that it is possible to accept the importance of the emergence of new forms of social risk and acknowledge the significance of efforts to develop welfare states policies involving a shift of opportunities and decision making on to individuals without accepting the 'death of social class' thesis.

Vulnerability and multiple deprivation perspectives on economic exclusion in Europe: A latent class analysis

In this paper we address issues relating to vulnerability to economic exclusion and levels of economic exclusion in Europe. We do so by applying latent class models to data from the European Community Household Panel for thirteen countries. This approach allows us to distinguish between vulnerability to economic exclusion and exposure to multiple deprivation at a particular point in time. The results of our analysis confirm that in every country it is possible to distinguish between a vulnerable and a non-vulnerable class. Association between income poverty, life-style deprivation and subjective economic strain is accounted for by allocating individuals to the categories of this latent variable. The size of the vulnerable class varies across countries in line with expectations derived from welfare regime theory. Between class differentiation is weakest in social democratic regimes but otherwise the pattern of differentiation is remarkably similar. The key discriminatory factor is life-style deprivation, followed by income and economic strain. Social class and employment status are powerful predictors of latent class membership in all countries but the strength of these relationships varies across welfare regimes. Individual biography and life events are also related to vulnerability to economic exclusion. However, there is no evidence that they account for any significant part of the socio-economic structuring of vulnerability and no support is found for the hypothesis that social exclusion has come to transcend class boundaries and become a matter of individual biography. However, the extent of socio-economic structuring does vary substantially across welfare regimes. Levels of economic exclusion, in the sense of current exposure to multiple deprivation, also vary systematically by welfare regime and social class. Taking both vulnerability to economic exclusion and levels of exclusion into account suggests that care should be exercised in moving from evidence on the dynamic nature of poverty and economic exclusion to arguments relating to the superiority of selective over universal social policies.

Economic globalization, inequality and body mass index:a cross-national analysis of 127 countries

This article investigates to what extent the worldwide increase in body mass index (BMI) has been affected by economic globalization and inequality. We used time-series and longitudinal cross-national analysis of 127 countries from 1980 to 2008. Data on mean adult BMI were obtained from the Global Burden of Metabolic Risk Factors of Chronic Diseases Collaborating Group. Globalization was measured using the Swiss Economic Institute (KOF) index of economic globalization. Economic inequality between countries was measured with the mean difference in gross domestic product per capita purchasing power parity in international dollars. Economic inequality within countries was measured using the Gini index from the Standardized World Income Inequality Database. Other covariates including poverty, population size, urban population, openness to trade and foreign direct investment were taken from the World Development Indicators (WDI) database. Time-series regression analyses showed that the global increase in BMI is positively associated with both the index of economic globalization and inequality between countries, after adjustment for covariates. Longitudinal panel data analyses showed that the association between economic globalization and BMI is robust after controlling for all covariates and using different estimators. The association between economic inequality within countries and BMI, however, was significant only among high-income nations. More research is needed to study the pathways between economic globalization and BMI. These findings, however, contribute to explaining how contemporary globalization can be reformed to promote better health and control the global obesity epidemic. © 2013 Copyright Taylor and Francis Group, LLC.