Regulating IPOs: Evidence from going public in London, 1900–1913
AbstractThis study assesses the impact of self-regulation on equity markets by analysing IPO failure rates on the London Stock Exchange during 1900–13. Focussing on differences between Official Quotation (OQ) and Special Settlement (SS) methods of going public, we find that the failure rate of IPOs by way of SS was considerably higher even after controlling for firm characteristics and for the presence of underwriters and elite directors. Furthermore, overall market-adjusted returns for SS IPOs, including the relatively few IPO “winners”, were extremely poor. Our findings have implications for the literature on self-regulation of securities markets as well as long-standing debates on British capital market development before 1914.
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Bibliographic InfoArticle provided by Elsevier in its journal Explorations in Economic History.
Volume (Year): 51 (2014)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/inca/622830
Equity listings; Financial development; Investor protection; Firm survival; Law and finance;
Find related papers by JEL classification:
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
- K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
- N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
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