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Is Regulation Essential to Stock Market Development? Going Public in London and Berlin, 1900-1913

  • Carsten Burhop

    (University of Cologne)

  • David Chambers

    (University of Cambridge)

  • Brian Cheffins

    (University of Cambridge)

Registered author(s):

    This 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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    Paper provided by University of Cologne, Department of Economic and Business History in its series Cologne Economic History papers with number 10.

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    Length: 42 pages
    Date of creation: Mar 2011
    Date of revision: Mar 2011
    Publication status: Published in Cologne Economic History Paper, 2011
    Handle: RePEc:wso:wpaper:10
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    6. Richard B. Carter & Frederick H. Dark & Ajai K. Singh, 1998. "Underwriter Reputation, Initial Returns, and the Long-Run Performance of IPO Stocks," Journal of Finance, American Finance Association, vol. 53(1), pages 285-311, 02.
    7. La Porta, Rafael & Lopez-de-Silanes, Florencio & Schleifer, Andrei & Vishny, Robert, 2001. "Investor Protection and Corporate Governance," Working Paper Series rwp01-017, Harvard University, John F. Kennedy School of Government.
    8. Burhop, Carsten & Wolff, Guntram B., 2005. "A Compromise Estimate of German Net National Product, 1851 1913, and its Implications for Growth and Business Cycles," The Journal of Economic History, Cambridge University Press, vol. 65(03), pages 613-657, September.
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