Policy Risk, Uncertainty, and Investment: Evidence from the English East India Company∗
نویسنده
چکیده
Governments can have large e ects on investment by raising policy risks and uncertainty. This paper estimates their e ects by studying the famous English East India Company. It had di cult relations with some English governments and positive relations with others. This translated into either hostile or friendly policies. New time-series data on the Company's shipping and port capacity are used to analyze the e ects of English governments and government changes on investment. Econometric results show that investment rates were lower in years with a new monarch and when elections changed the majority party in the House of Commons. Investment also differed depending on which monarch or majority party governed. This paper shows the relevance of policy risk and uncertainty over a long time-span, especially for companies involved in prominent public partnerships. It also illustrates the value of studying evolving policy risks in historical settings.
منابع مشابه
`There can be no partnership with the king': political instability and the English East India Company∗
The English East India Company and the English government formed a historic partnership to invest and share in the gains from Asian-European trade. While the partnership was successful for the Company in the long-run, its charter was unfavorably renegotiated on many occasions during the rst 150 years. This paper argues that political instability weakened the government's commitment to honor the...
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