EconPapers    
Economics at your fingertips  
 

Taking firms to the stock market: IPOs and the importance of large banks in Imperial Germany 1896 - 1913

Sibylle Lehmann-Hasemeyer ()

No 58-2012, FZID Discussion Papers from University of Hohenheim, Center for Research on Innovation and Services (FZID)

Abstract: Large universal banks played a major role for Germany's industrialisation because they provided loans to the industry and thereby helped firms to overcome liquidity constraints. Previous research has also argued that they were equally important on the German stock market. The present paper 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 of the paper 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 caused by the competition between underwriters, but also by the tight regulation of underwriting, which ensured the quality of all firms on the German stock market.

Keywords: Financial History; Universal Banks; IPOs (search for similar items in EconPapers)
JEL-codes: G21 G24 N23 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-fmk and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/65377/1/727859196.pdf (application/pdf)

Related works:
Journal Article: Taking firms to the stock market: IPOs and the importance of large banks in imperial Germany, 1896–1913 (2014) Downloads
Working Paper: Taking Firms to the Stock Market: IPOs and the Importance of Large Banks in Imperial Germany 1896-1913 (2012) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:fziddp:582012

Access Statistics for this paper

More papers in FZID Discussion Papers from University of Hohenheim, Center for Research on Innovation and Services (FZID) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2020-02-22
Handle: RePEc:zbw:fziddp:582012