Law, Politics and the Rise and Fall of German Stock Market Development, 1870-1938

Law and politics had a significant impact on stock market development in Germany between 1870 and the beginning of World War II. IPOs can be a bellwether for stock market development and nearly 1100 were carried out on the Berlin Stock Exchange during this period. Regulatory changes occurring in the 1880s and 1890s contributed to a very high survival rate among those companies going public. The IPO market retained its vibrancy through the 1920s notwithstanding an infamous hyperinflation episode. Collapse followed, however, in the 1930s, at least partly due to regulatory changes inimical to the publicly quoted firm brought about by the ideological shifts under Nazi rule.

Keywords: Initial public offerings; Germany; Financial History; Corporate Law; Stock Markets

JEL Classification: N23, N24, G18, G24, K22

Suggested Citation: Suggested Citation

Burhop, Carsten and Chambers, David and Cheffins, Brian R., Law, Politics and the Rise and Fall of German Stock Market Development, 1870-1938 (January 1, 2015). European Corporate Governance Institute (ECGI) - Law Working Paper No. 283/2015, University of Cambridge Faculty of Law Research Paper No. 4/2015, Available at SSRN: https://ssrn.com/abstract=2548759 or http://dx.doi.org/10.2139/ssrn.2548759