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ABSTRACT
The integration of financial markets was a facet of the increasing globalization of the worldwide economy. The focus in this paper is the business organizational perspective of corporations that operated in Portuguese overseas territories: Distance, climate, lack of trained local labor force, and other difficulties related with cultural differences, required organizational aspects that represented higher risk and higher capital rewards. They were higher than the average index of the Lisbon Stock Market as a whole, and must be interpreted in the context of the role of different organizational aspects for entrepreneurship and businesses in overseas territories.
Disclosure of potential conflicts of interest
This paper reflects the authors' views, and not necessarily those from Nova School of Business and Economics. A preliminary version of this paper was presented at the Boston World Economic History Congress. We thank the EURONEXT-Lisbon Historical Archives, and Ana Gaspar from Arquivo Contemporâneo do Ministério das Finanças. We thank Maximiano Pinheiro, Maria João Azevedo, Luís Campos e Cunha, Jorge Braga de Macedo, José Tavares, Nuno Valério, and James Brenan for discussion, and John Huffstot for our English correction. Any errors are ours.
Notes
1. The studies produced until now focus on the political (and military) aspects of the empire and on the ethnographic descriptions of those territories. It is also known that during Pombal’s eighteenth-century government trade corporations were created seeking to boost economic integration with Brazil. That corporate model seems to have been extrapolated to other territories of the Portuguese empire to complement the Portuguese state in the task of running large portions of the empire. Duarte (Citation2000).
2. Sociedade Portuguesa de Geografia.
3. All financial documents on these military campaigns are available in the Lisbon Overseas Historical Archive Arquivo Histórico do Ultramar.
4. The action of altos comissários such as Norton de Matos and Vicente Ferreira in Angola is often recalled.
5. Note, however, that the first demographic censuses were organized only in 1940, and their quality for remote countryside regions is much lower than for civilized regions, a terminology that was used in these documents. Instituto Nacional de Estatística, Lisbon.
6. The paper cannot embrace the less measurable impacts such as education, healthcare, and transport infrastructures in the overseas territories.
7. It was given so many powers that this company had an independent police force to fight against smuggling of diamonds, easily unearthed in the geographic areas whose concession was granted to the company.
8. Cassis (Citation1997) states the same aspects, globally.
9. Although history attributes to India the underlying motivation for the extraordinary project of the Portuguese discoveries from the beginning of the 1400s – to by-pass the Italian cities that supplied Europe with spices imported from India – it was not in the Portuguese State of India that private companies played a significant auxiliary role to the state. Macau probably deserves a different and independent study, as it always (even today) operated as an entry and exit door for China to trade with the outside world.
10. Cotonang was a cotton cultivation firm in Angola, using Belgian-Portuguese capital, founded in 1926. Riots and revolt against the company’s labor conditions in 1961 have been pointed out as the beginning of the colonial war.
11. Hidroeléctrica do Revué, at Mozambique, listed since 1957.
12. Fina do Lobito, at Angola, listed since 1958.
13. Companhia Agrícola do Cassequel, in Angola, listed since 1937.
14. This is their contribution to the index.
15. Which estimates the average cost of capital and the equity return premium for all firms listed on the Lisbon Stock Exchange for the period 1978–2011.
16. After the Lisbon Stock Exchange joined the Euronext group of Exchanges, in February 2002, this is the legal name adopted by this Portuguese affiliate.
17. Note that the Stock Exchange used the Roll Call system of trading during this period, whereby each listed share was called one at a time and a single equilibrium price was discovered after confrontation of all the orders carried by the brokers for that particular asset. The prices of those orders closest to that equilibrium but already excluded from trading produced the daily Bid and Ask prices.