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Disclosure of mergers without regulatory restrictions: Insider trading in pre-1914 Germany

By Gerhard Kling

Abstract

In the pre-World-War I period, lacking regulatory restrictions allowed ‘hidden' mergers however, some companies disclosed information voluntarily. I analyze insider gains by investigating the share price behavior prior to merger announcements. When companies hid information, stocks exhibited positive abnormal returns prior to newspaper reports that uncovered hidden transactions.

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Citations

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