This study of over 1,000 initial public offerings (IPOs) on the Berlin stock exchange from German unification to the eve of World War II draws attention to the importance of regulation and deepens our understanding of German stock market development. An increasingly exacting regulatory environment from the early 1880s to 1914 made a vital contribution to the higher likelihood of firms going public surviving. In the inhospitable regulatory setting of the 1930s, IPO activity drew to a halt and the development in the German stock market over the preceding decades reversed. As a complement to our analysis of the impact of regulation, we document the increased involvement of leading universal banks (D-banks) in the IPO market over the whole period.
About the authors
Carsten Burhop is Professor for Constitutional, Social, and Economic History at the University of Bonn. His main research interests are financial history, the history of innovation, and historical national accounting. Recent papers have been published in Business History Review, Explorations in Economic History, and Economic History Review.
David Chambers is Reader in Finance at the University of Cambridge Judge Business School. His main research interests are empirical corporate finance, initial public offerings, asset management, financial history, and law and finance. Recent papers have been published in Business History Review, Journal of Economic History, and Journal of Economic Perspectives.
Brian R. Cheffins is Berwin Professor of Corporate Law at the University of Cambridge. His main research interests are corporate law, corporate governance, law and finance, and business history. Recent papers have been published in Journal of Corporation Law, Business History Review, and Delaware Journal of Corporate Law.
We would like to thank Caroline Fohlin, Leslie Hannah, Martin Gelter, Sibylle Lehmann-Hasemeyer, Larry Neal, Jan Otmar-Hesse, Mark Roe, and Felix Selgert for their comments on an earlier version of this paper, as well as seminar participants at the University of Belfast, the Rotterdam School of Management and the Max Planck Institute for Research on Collective Goods, Bonn. Financial support by Deutsche Forschungsgemeinschaft (grant no. BU 1805/7-2) is gratefully acknowledged. This paper was prepared while Cheffins was a Keynes Fellow and while Chambers was Academic Director of the Newton Centre for Endowment Asset Management, Judge Business School, and a Keynes Fellow.
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