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Law, Politics, and Financial Development: The Great Reversal of the U.K. Corporate Debt Market

Published online by Cambridge University Press:  09 August 2013

Christopher Coyle  and
John D. Turner
Christopher Coyle
Affiliation:
Lecturer in Finance and Financial History, Queen's University Management School, Queen's University of Belfast, Belfast BT7 1NN, Northern Ireland, UK. E-mail: [email protected].
John D. Turner
Affiliation:
Professor of Finance and Financial History, Queen's University Management School, Queen's University of Belfast, Belfast BT7 1NN, Northern Ireland, UK. E-mail: [email protected].
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Abstract

This article examines the role of creditor protection in the development of the U.K. corporate bond market. This market grew rapidly in the late nineteenth century, but in the twentieth century it experienced a reversal, albeit with a short-lived post-1945 renaissance. Such was the extent of the reversal that the market from the 1970s onwards was smaller than it had been in 1870. We find that law does not explain the variation in the size of this market over time. Alternatively, our evidence suggests that inflation and taxation policies were major drivers of this market in the post-1945 era.

Type
Articles
Information
The Journal of Economic History , Volume 73 , Issue 3 , September 2013 , pp. 810 - 846
Copyright
Copyright © The Economic History Association 2013 

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Footnotes

An earlier version of this article was presented at QUCEH workshops at Queen's University Belfast, the Fourth EuroStock History conference in Bonn, and the 2012 European Business History Association conference in Paris. Thanks to Graeme Acheson, John Armour, Gerben Bakker, Stefano Battilossi, Matthias Beck, Mark Billings, Graham Brownlow, Carsten Burhop, Gareth Campbell, David Chambers, Brian Cheffins, Chris Colvin, Marc Deloof, Les Hannah, Joost Jonker, Gerhard Kling, David Le Bris, Amir Rezaee, Janette Rutterford, Luke Samy, and Steve Toms for their comments. Coyle acknowledges financial support from the Department of Education and Learning.

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