Asymmetric Information, Market Power, and the Underpricing of New Stock Issues in Germany, 1882-1892
Bibliographic Data
| ID | 5753291 |
|---|---|
| Authors | Caroline Fohlin (0000-0002-1380-2788, University of Baltimore, corresponding author) |
| Year | 2010 |
| Volume | 70 |
| Issue | 3 |
| Pages | 630-656 |
| Publication date | 2010-09-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Journal of Economic History (JOURNAL) |
| Journal identifiers | ISSN: 0022-0507 • E-ISSN: 1471-6372 |
| Publisher | Cambridge University Press (CUP) (PUBLISHER) |
| DOI | 10.1017/s0022050710000562 |
| OpenAlex | W2108234107 |
| Language | EN |
| Citations received | 6 |
| References cited | 32 |
Investors in new stock issues in Germany in the 1880s experienced low spreads between the price they paid for stock and the price at which they could sell the stock in the market. Stock issuing companies paid substantial fees to underwriting banks, and these costs increased with the underwriter's market share. Bank's faced lower issuing costs than did nonfinancial firms. These patterns are consistent with a situation in which underwriters exploited their access to better information (agency problems) and had market power, but do not support the supposed lemons problems that motivated the imposition of stringent regulations in 1896
Agency cost · Business · Common stock · Corporate governance · Economics · Financial system · Information asymmetry · Market economy · Market maker · Market power · Monetary economics · Restricted stock · Stock (firearms) · Stock market · Stock price · Underwriting · Banking stability, regulation, efficiency · Corporate Finance and Governance · Finance · Historical Economic and Social Studies
| Unique citing works | 6 |
|---|---|
| Citations per year | 0,46 |
| Citation span | 2013 - 2026 (14) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 6 |