DP10558 The Berlin Stock Exchange in Imperial Germany ? a Market for New Technology?
| Author(s): | Sibylle Lehmann, Jochen Streb |
| Publication Date: | April 2015 |
| Keyword(s): | industrialisation, innovation, IPO, stock exchange |
| JEL(s): | G14, N23 |
| Programme Areas: | Economic History |
| Link to this Page: | cepr.org/active/publications/discussion_papers/dp.php?dpno=10558 |
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.