Informed investors, screening, and sorting on the London capital market, 1891-1913

Sturla Fjesme, Leslie Hannah and Lyndon Moore

Explorations in Economic History, 2024, vol. 91, issue C

Abstract: Thousands of prospectuses offered shares to British investors at the turn of the twentieth century. We find evidence that there were informed investors who participated in the market at this time. Firms that attracted additional investor demand were more likely to be listed on the London Stock Exchange, survive longer, and achieve better long-run equity returns. We find that the exchange screened lower quality firms away from the main board. The lowest quality firms sorted themselves and did not apply to either the London Stock Exchange main or second board.

Keywords: London stock exchange; Capital markets; Initial public offering (search for similar items in EconPapers)
JEL-codes: G30 N2 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:exehis:v:91:y:2024:i:c:s0014498323000098

DOI: 10.1016/j.eeh.2023.101515

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