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

Carsten Burhop (), David Chambers () and Brian Cheffins ()
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Carsten Burhop: Max Planck Institute for Research on Collective Goods, Bonn and University of Cologne
David Chambers: Judge Business School, University of Cambridge
Brian Cheffins: Faculty of Law, University of Cambridge

No 2011_15, Discussion Paper Series of the Max Planck Institute for Research on Collective Goods from Max Planck Institute for Research on Collective Goods

Abstract: 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.

Keywords: Regulation; Financial history; Law and finance; initial public offering; investor protection (search for similar items in EconPapers)
JEL-codes: G14 G18 G24 G32 G38 K22 N23 (search for similar items in EconPapers)
Date: 2011-07
New Economics Papers: this item is included in nep-fmk, nep-his and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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