Is Regulation Essential to Stock Market Development? Going Public in London and Berlin, 1900-1913
AbstractThis study of initial public offerings (IPOs) carried out on the Berlin and London stock exchanges between 1900 and 1913 casts doubt on the received “law and finance” wisdom that legally mandated investor protection is pivotal to the development of capital markets. IPOs that resulted in official quotations on the London Stock Exchange performed as well as Berlin IPOs despite the Berlin market being more extensively regulated than the laissez faire London market. Moreover, the IPO failure rate on these two stock markets was lower than it was with better regulated US IPOs later in the 20th century.
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Bibliographic InfoPaper provided by Max Planck Institute for Research on Collective Goods in its series Working Paper Series of the Max Planck Institute for Research on Collective Goods with number 2011_15.
Date of creation: Jul 2011
Date of revision:
Regulation; Financial history; Law and finance; initial public offering; investor protection;
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- K22 - Law and Economics - - Regulation and Business Law - - - Business and Securities Law
- N23 - Economic History - - Financial Markets and Institutions - - - Europe: Pre-1913
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-27 (All new papers)
- NEP-FMK-2011-07-27 (Financial Markets)
- NEP-HIS-2011-07-27 (Business, Economic & Financial History)
- NEP-REG-2011-07-27 (Regulation)
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