IDEAS home Printed from https://ideas.repec.org/a/oup/cambje/v43y2019i2p271-294..html
   My bibliography  Save this article

Technological revolutions and speculative finance: evidence from the British Bicycle Mania

Author

Listed:
  • William Quinn

Abstract

Technological revolutions are often accompanied by substantial stock price reversals, but previous literature has produced competing explanations for why this is the case. This paper brings new evidence to this debate using data from the innovation-driven British Bicycle Mania of 1895–1900, in which cycle share prices rose by over 200% before collapsing by more than 75%. These price patterns are not fully explained by fundamentals or by changes in the nature of risk associated with cycle shares. Instead, the evidence from the Bicycle Mania supports the hypothesis of Perez (2009), who argues that new technology, high short-term profits and loose monetary conditions increase the level of speculative investment, ‘decoupling’ share prices from fundamentals.

Suggested Citation

  • William Quinn, 2019. "Technological revolutions and speculative finance: evidence from the British Bicycle Mania," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(2), pages 271-294.
    • Handle: RePEc:oup:cambje:v:43:y:2019:i:2:p:271-294.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/cje/bey029
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Quinn, William & Turner, John D., 2020. "Bubbles in history," QUCEH Working Paper Series 2020-07, Queen's University Belfast, Queen's University Centre for Economic History.
    2. Quinn, William & Turner, John D., 2021. "Riding the bubble or taken for a ride? Investors in the British bicycle mania," QUCEH Working Paper Series 21-07, Queen's University Belfast, Queen's University Centre for Economic History.
    3. David A Bogle & Christopher Coyle & John D Turner, 2022. "Capital market development over the long run: the portfolios of UK life assurers over two centuries [Corporate ownership and control in Victorian Britain]," European Review of Economic History, European Historical Economics Society, vol. 26(3), pages 370-398.
    4. Bogle, David A. & Coyle, Christopher & Turner, John D., 2020. "Capital market development over the long run: The portfolios of UK life assurers over two centuries," QUCEH Working Paper Series 2020-09, Queen's University Belfast, Queen's University Centre for Economic History.
    5. Bogle, David & Coyle, Christopher & Turner, John D., 2020. "Capital Market Development Over the Long Run: The Portfolios of UK Life Assurers Over Two Centuries," QBS Working Paper Series 2020/11, Queen's University Belfast, Queen's Business School.
    6. Quinn, William & Turner, John D., 2021. "Riding the Bubble or Taken for a Ride? Investors in the British Bicycle Mania," QBS Working Paper Series 2021/08, Queen's University Belfast, Queen's Business School.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:cambje:v:43:y:2019:i:2:p:271-294.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/cje .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.