Abstract

The German financial system is typically considered to be bank-based financial system. Yet, recent research shows that the relevance of bank credits for corporate finance declined during the late 19th and early 20th century. Moreover, it has been suggested that banks nonetheless remained important financial intermediaries since they acted as gatekeepers to the stock market. We show that a large stock market developed in Germany between the 1870s and World War I. Moreover, we demonstrate that banks were indeed important intermediaries between corporations going public and investors. To support our hypothesis, we present newly collected data about the number and value of firms listed in Germany at various points in time between 1869 and 1925.

This paper is joint work with Sibylle Lehmann. Those interested in joining us for dinner should contact ddc22.