Hostname: page-component-8448b6f56d-c4f8m Total loading time: 0 Render date: 2024-04-19T21:23:24.483Z Has data issue: false hasContentIssue false
  • English
  • Français

Dividend policy in Norwegian banking before 1914

Published online by Cambridge University Press:  18 February 2011

Lars Fredrik Øksendal
Lars Fredrik Øksendal*
Affiliation:
Norges Bank and Norwegian School of Economics and Business Administration
*
Lars.Oksendal@nhh.no
Get access Rights & Permissions [Opens in a new window]

Abstract

This article discusses the dividend strategy adopted by Norwegian commercial banks before 1914. Based on a unique data set covering all banks in the period 1882– 1913 as well as six other institutions for the pre-1882 period, I identify the existence of a strong bias towards the payment of high and stable dividends to shareholders. The origins of such bias lie in the specific institutional set-up of commercial banking, the expectations of shareholders and the absence of developed securities markets. Combined with a strong preference for high gearing, this feature contributed to increase the fragility of the Norwegian banking system.

Keywords

commercial banksdivided policybanking structureNorway

JEL classification

N23: Europe: Pre-1913
Type
Articles
Information
Financial History Review , Volume 18 , Issue 2 , August 2011 , pp. 217 - 241
Copyright
Copyright © European Association for Banking and Financial History e.V. 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

References

Aschehoug, T. H. (1904). Socialeconomik, volume III. Christiania: Aschehoug.Google Scholar
Egge, Å. (1983). Transformation of bank structures in the industrial period: the case of Norway. Journal of European Economic History, 12, pp. 271–94.Google Scholar
Eitrheim, Ø. K., Gerdrup, K. and Klovland, J. T. (2004). Credit, banking and monetary developments in Norway 1819–20. In Eitrheim, Ø.Klovland, J. T. and Qvigstad, J. F. (eds.), Historical Monetary Statistics for Norway 1819–2003 (Norges Bank Occasional Papers no. 35). Oslo: Norges Bank, chapter 10.Google Scholar
Gasslander, O. (1960). History of Stockholm Enskilda Bank to 1914. Stockholm: Enskilda Bank (no year of publication for English translation, but the original two volumes in Swedish were published in 1956 and 1960 respectively).Google Scholar
Gierløff, C. (1943). En norsk banksaga. Trondheim: Den Nordenfjeldske Kreditbank.Google Scholar
Hansen, P. H. and Mørch, S. (1997). Den Danske Bank. Copenhagen: Centrum.Google Scholar
Hertzberg, E. and Rygg, N. (1907). Den Norske Creditbank 1857–1907. Christiania: Den Norske Creditbank.Google Scholar
Hodne, F. (1981). Norsk økonomisk historie. Oslo: Gyldendal.Google Scholar
Hofstad, E. (1928). Det norske privatbankvæsens historie. Oslo: A/S Forretningslivs Forlag.Google Scholar
Klovland, J. T. (2004). Monetary aggregates in Norway 1819–2003. In Eitrheim, Ø., Klovland, J. T. and Qvigstad, J. F. (eds.), Historical Monetary Statistics for Norway 1819–2003 (Norges Bank Occasional Papers no. 35). Oslo: Norges Bank, chapter 5.Google Scholar
Knutsen, S. (2003). The development of a hybrid structure in Norway: banks and economic change in the European periphery. In Forsyth, D. J. and Verdier, D. (eds.), The Origins of National Financial Systems: Alexander Gerschenkron Reconsidered. London: Routledge, pp. 144–61.Google Scholar
Lindgren, H. and Sjøgren, H. (2003). Banking systems as ‘ideal types’ and as political economy. In Forsyth, D. J. and Verdier, D. (eds.), The Origins of National Financial System: Alexander Gerschenkron Reconsidered. London: Routledge, pp. 126–43.Google Scholar
Miller, M. H. and Modigliani, F. (1961). Dividend policy, growth, and the valuation of shares. Journal of Business, 34, pp. 411–33.CrossRefGoogle Scholar
Nordvik, H. W. (1993). The banking system, industrialization and economic growth in Norway, 1850–1914. Scandinavian Economic History Review, 1, pp. 51–72.CrossRefGoogle Scholar
Østvedt, E. (1951). Skiensfjorden Kreditbank gjennom 25 år. Skien: Skiensfjorden Kreditbank.Google Scholar
Petersen, E. (1957). Den Norske Creditbank 1857–1957. Oslo: Den Norske Creditbank.Google Scholar
Pettit, R. (1972). Dividend announcements, security performance, and capital market efficiency. The Journal of Finance, 27, pp. 993–1007.CrossRefGoogle Scholar
Rygg, N. (1954). Norges Banks historie, volume II. Oslo: Norges Bank.Google Scholar
Seip, J. A. (1971). Ole Jacob Broch og hans samtid. Oslo: Gyldendal.Google Scholar
Sejersted, F. (1968). Fra monopolbank til seddelbank. Historisk Tidsskrift, 47, pp. 149–72.Google Scholar
Sundt, E. (1901). Krisen i Kristiania 1899. Samtiden, 12.Google Scholar
Søderlund, E. (1964). Skandinaviska banken 1864–1914. Stockholm: Skandinaviska banken.Google Scholar
Thon, E. and Due, R. (1919). Kristiania Børs 1819–1919. Et tilbakeblikk ved 100 aarsjubileet. Christiania: Børs- og Handelskomiteen.Google Scholar

Sources

Bergens Privatbank (1856), Bergens Privatbanks første lover, reproduced in Hoftstad (1928)Google Scholar
Bergens Privatbank, Annual Report/Published balances, 1856–81Google Scholar
CBK (1848), Christianias Kreditkasses opprinnelige lover, reproduced in Hoftstad 1928Google Scholar
Danmarks Statistikk, Kreditmarkedsstatistikk, Statiske undersøkelser no. 24, Copenhagen 1969Google Scholar
DNC (1857), De opprinnelige statutter for Den norske Creditbank, reproduced in Hoftstad 1928Google Scholar
Drammen Privatbank, Annual Report/Published balances 1868–81Google Scholar
Farmand (financial weekly) 1893–1913Google Scholar
Nordenfjeldske Kreditbank, Annual Report/Published balances 1868–81Google Scholar
Statistics Norway, Statistical Yearbook, 1882–99Google Scholar
Statistics Norway, Private Aktiebanker, 1900–13Google Scholar