February 15, 2021
11 am EST
“Managing the Balance Sheet: Hidden Reserves, Dividend Smoothing and Balance Manipulation in the German Chemical Industry around 1900.”
Frederic Steinfeld, Post-Doctoral Researcher, University of Gothenburg
Chair: Sergio Castellanos Gamboa, Bangor University
Download teaser slides here
Frederic Steinfeld is a post-doctoral researcher at the Unit for Economic History at the School of Business, Economics and Law, University of Gothenburg. He holds a PhD from Goethe-University Frankfurt, Germany, which he received for a thesis about the financial and accounting history of the German chemical industry, 1863–1916. His research interest lies within 19th and 20th century economic and business history with a special focus on financial and accounting history, as well as the history of economic thought.
Scholars in economics and economic history are using historical balance sheets to quickly extract large numbers of historical data on total assets, debt and equity from a broad variety of firms. This information is used to deduce general statements about the financial conditions of stock companies and even about the scope of action the respective managements had regarding dividend payment and capital structure. However, the use of the information is highly problematic, as scholars often neglect the influence management could have on the actual numbers published. Drawing on a case study from the German chemical industry between the 1885 and 1906, I am able to show that managements used a wide range of financial and accounting instruments in order to manipulate the public balance sheets and profits and thereby withholding crucial financial information from the shareholders.