The Berlin Stock Exchange in Imperial Germany - A Market for New Technology?
29 Pages Posted: 27 Apr 2015
Date Written: April 2015
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: Suggested Citation