The Dynamics of (De-)Listing Decisions – The Impact of Regulatory Changes and Economic Policy Events in Germany 1870-1933

Project Start:01/2017
Researchers:Andrej Gill, Marius Liebald, Uwe Walz
Category: Financial Markets
Funded by:LOEWE

The main objective of the research project is to investigate the determinants of (de-)listing

decisions in historical Germany in the 1870-1933 period. Thereby, we aim to investigate to

which extent these decisions are driven by firm-specific factors and general trends or by

policy interventions and regulatory changes. In order to do so we will separately analyze the

going-public decisions and the going-private decisions which together in Germany in the

1870-1933 period (at that time one of financially most advanced economies) mimic very

much the corresponding dynamics in the US in the last decades (since the 1980s).

This research as highly relevant and topical not only because of these similar dynamics

(which are currently intensively discussed in the finance literature, see e.g. Doidge et al

(NBER, 2015)), but also due to the fact that these developments are an essential part of the

change of Germany from being a rather capital-market-oriented system (before WWII) to a

bank-dominated system after WW II (see e.g. Rajan/Zingales (JFE, 2003) on this). Another

decisive reason for looking at this time period is the fact that it is not only characterized by a

number of regulatory changes but also characterized by economic policy events (such as the

German hyperinflation 1922-23) which make the German case very outstanding.

For this purpose we will extend the SAFE historical market price data set by collecting

balance sheet data from the “Handbuch der deutschen Aktiengesellschaften“. This

handbook is available in hard copy and contains data on all German „Aktiengesellschaften“

at the time, including those listed on the main exchanges in Germany (most notably the

Berlin Stock exchange). Merging all these information together with the information on

listing and delisting decisions available from ‘’Berliner Zeitung’’ allows us to model and

empirically investigate the determinants of these decisions along the lines of the Cox

proportional hazard model employed in Gill/Walz (JCF, 2016).

Thereby, we aim to address the impact of regulatory changes in the 1890/1900s on the IPO

dynamics as well as investigate the impact of the German hyperinflation on these dynamics.

Thereby, we will address the specific question; “where all the IPOs have gone” as well as

more general one “why the German capital market lost its relevance and role in this

particular area”.