The Berlin Stock Exchange in Imperial Germany - A Market for New Technology?

29 Pages Posted: 27 Apr 2015

See all articles by Sibylle Lehmann

Sibylle Lehmann

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods; Trinity College (Dublin) - Institute for International Integration Studies (IIIS)

Jochen Streb

University of Mannheim

Date Written: April 2015

Abstract

Analysing 474 cases of firms going public in the German capital between 1892 and 1913, we show that innovative firms could rely on the Berlin stock market as a source of financing. The data also reveal that initial public offerings (IPO) of innovative firms were characterized by particularly low underpricing, comparatively high first trading prices, and no long-run underperformance. We interpret these empirical results as evidence for the surprising fact that contemporary investors had rational expectations.

Keywords: industrialisation, innovation, IPO, stock exchange

JEL Classification: G14, N23

Suggested Citation

Lehmann, Sibylle and Streb, Jochen, The Berlin Stock Exchange in Imperial Germany - A Market for New Technology? (April 2015). CEPR Discussion Paper No. DP10558. Available at SSRN: https://ssrn.com/abstract=2599550

Sibylle Lehmann (Contact Author)

Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Research on Collective Goods ( email )

Kurt-Schumacher-Str. 10
D-53113 Bonn, 53113
Germany

Trinity College (Dublin) - Institute for International Integration Studies (IIIS) ( email )

The Sutherland Centre, Level 6, Arts Building
Trinity College
Dublin 2
Ireland

Jochen Streb

University of Mannheim ( email )

L7, 3-5
Mannheim, 68131
Germany

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