The Genesis and the Development of the Pre-war Japanese Stock Market
AbstractThis paper examines the development of the Tokyo Stock Exchange since its inception in 1878 to the mid-1930s. Special attention is paid to the increases in the number of listed stocks throughout this period. By the mid-1930s, the Tokyo Stock Exchange had grown to a market bigger (measured relative to GDP) than many contemporary stock exchanges in major economies. Even compared with the stock exchanges in major countries today, the pre-war Tokyo Stock Exchange was quite large. New listings in the spot market section of the Tokyo Stock Exchange were not restricted for most of this period. Our regression analysis reveals that many firms decided to list their stocks on the Tokyo Stock Exchange as they became older and bigger. The commercial code change in 1911, which increased the protection of outside shareholders, also had a positive impact on the listings on the Tokyo Stock Exchange. The Tokyo Stock Exchange reform of 1918 that aimed at standardization of the spot transactions increased the listings on the Exchange. The analysis also suggests that in the earlier period, there was a "home bias" that the companies located in the Eastern part of Japan (closer to the Tokyo Stock Exchange) were more likely to be listed in the Tokyo Stock Exchange, but the effect diminished after the Exchange reform of 1918.
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Bibliographic InfoPaper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-320.
Length: 40 pages
Date of creation: Feb 2005
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Other versions of this item:
- "Okazaki, Tetsuji" & "Hamao, Yasushi" & "Hoshi, Takeo", 2005. "The Genesis and the Development of the Pre‐War Japanese Stock Market," Economic Review, Hitotsubashi University, vol. 56(1), pages 15-29, January.
- Tetsuji Okazaki & Yasushi Hamao & Takeo Hoshi, 2004. "The Genesis and the Development of the Pre-war Japanese Stock Market," CARF J-Series CARF-J-007, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
- NEP-ALL-2005-02-27 (All new papers)
- NEP-FIN-2005-02-27 (Finance)
- NEP-FMK-2005-02-27 (Financial Markets)
- NEP-HIS-2005-02-27 (Business, Economic & Financial History)
- NEP-SEA-2005-02-27 (South East Asia)
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