Chapter

Listing Policy and Development of the Tokyo Stock Exchange in the Prewar Period

Yasushi Hamao, Takeo Hoshi and Tetsuji Okazaki

in Financial Sector Development in the Pacific Rim

Published by University of Chicago Press

Published in print April 2009 | ISBN: 9780226386843
Published online February 2013 | e-ISBN: 9780226386867 | DOI: http://dx.doi.org/10.7208/chicago/9780226386867.003.0013
Listing Policy and Development of the Tokyo Stock Exchange in the Prewar Period

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During the first forty years since the establishment of the Tokyo Stock Exchange (TSE) in 1878 the market was relatively small and the listed firms were concentrated in the areas close to Tokyo. This chapter examines why the TSE stayed relatively stagnant during the first forty years and why it suddenly took off in the late 1910s. It identifies a small change in the TSE's policy toward listing in its stock market in 1918. Before 1918, the firms had to apply to the TSE to be listed. After 1918, the TSE started trading some stocks without explicit applications from those firms. It is argued that this apparently small policy change allowed the TSE to escape from the low liquidity equilibrium and to take off.

Keywords: prewar Japan; Tokyo Stock Exchange; spot market; stock market; low liquidity; listing

Chapter.  15409 words.  Illustrated.

Subjects: Business and Management

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