 Taking firms to the stock market: IPOs and the importance of large banks in imperial Germany, 1896–1913Economic History Review, 2014, vol. 67, issue 1, 92-122 Abstract: type="main"> Large universal banks played a major role in Germany's industrialization because they provided loans to industry and thereby helped firms to overcome liquidity constraints. Previous research has also argued that they were equally important for the German stock market. This article provides quantitative and qualitative evidence that although the market for underwriters was dominated by a small oligopoly of six large banks, there was still perceptible competition, which kept fees and short-run profits low. Another interesting finding presented here is the absence of a signalling effect to investors. Neither underpricing nor the one-year performance was different for the IPOs issued by one of the Big Six. Thus, although the German IPO business was in the hands of a small oligopoly, investors did not benefit from the lack of competition. One explanation is that the quality of IPOs on the German stock market of the time was very good in general as a result of the competition between underwriters, but also as a result of the tight regulation of underwriting, which ensured the quality of all firms on the German stock market. Date: 2014 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:ehsrev:v:67:y:2014:i:1:p:92-122 Ordering information: This journal article can be ordered from Access Statistics for this article Economic History Review is currently edited by Stephen Broadberry More articles in Economic History Review from Economic History Society Contact information at EDIRC. |
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