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The Economic Benefits of Political Connections in Late Victorian Britain

Published online by Cambridge University Press:  13 March 2013

Fabio Braggion
Associate Professor, Department of Finance, Tilburg University; and Fellow, CentER, Room K 917, PO Box 90153, Warandelaan 2, 5000 LE Tilburg, The Netherlands. E-mail:
Lyndon Moore
Senior Lecturer, Department of Finance, Level 12, 198 Berkeley Street, The University of Melbourne, Victoria 3010Australia. E-mail:


The late Victorian era was characterized by close links between politicians and firms in the United Kingdom, with up to half of all members of Parliament serving as company directors. We analyze 467 British companies over the period 1895 to 1904. An analysis of election results shows that the election of a new tech director is associated with a 2 percent to 2.5 percent increase in that firm's share price, whereas old tech firms were unaffected by the electoral fortunes of their directors. New technology firms with political directors were more likely to undertake seasoned issues of both equity and debt.

Copyright © The Economic History Association 2013

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