Is Regulation Essential to Stock Market Development? Going Public in London and Berlin, 1900-1913
Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods
University of Cambridge - Judge Business School, Department of Finance & Accounting
Brian R. Cheffins
University of Cambridge - Faculty of Law; European Corporate Governance Institute (ECGI)
MPI Collective Goods Preprint, No. 2011/15
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
JEL Classification: G32, K22, N23, G18, G38, G14, G24working papers series
Date posted: July 23, 2011
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo5 in 0.296 seconds