Hostname: page-component-78c5997874-v9fdk Total loading time: 0 Render date: 2024-11-10T08:34:41.762Z Has data issue: false hasContentIssue false
  • English
  • Français

The Atlantic Telegraph Cable and Capital Market Information Flows

Published online by Cambridge University Press:  27 June 2006

CHRISTOPHER HOAG
CHRISTOPHER HOAG
Affiliation:
Assistant Professor of Business Administration and Economics, Coe College, 1220 First Avenue NE, Cedar Rapids, IA, 52402. E-mail: choag@coe.edu.
Get access Rights & Permissions [Opens in a new window]

Abstract

The completion of the undersea Atlantic telegraph cable more closely integrated securities markets on two continents. This article conducts an event study on the introduction of the Atlantic Cable in July 1866. Using daily data on one security with a dual listing on the New York and London stock exchanges, the event study provides some evidence that the information lag between the two markets shortened from ten days to zero days. Cointegration analysis confirms the result. Historical markets priced securities so well that transatlantic steamship crossing times can be recovered from stock prices.

Type
ARTICLES
Information
The Journal of Economic History , Volume 66 , Issue 2 , June 2006 , pp. 342 - 353
Copyright
© 2006 The Economic History Association

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Brown Stephen J., and Jerold B. Warner. 1985 “Using Daily Stock Returns: the Case of Event Studies.” Journal of Financial Economics 14, no. 1 3– 31.Google Scholar
Garbade Kenneth D., and William L. Silber. 1978 “Technology, Communication and the Performance of Financial Markets: 1840–1975.” Journal of Finance 33, no. 3 819– 32.Google Scholar
Hoag C. 2005 “The Atlantic Telegraph Cable and Capital Market Information Flows.” Working Paper, Available at http//www.public.coe.edu/∼choag/telegraph.html.
Michie Ranald C. 1987 The London and New York Stock Exchanges 1850–1914. London: Allen and Unwin,
Mitchell W. C. 1966 [1908] Gold, Prices, and Wages under the Greenback Standard. New York: Augustus M. Kelley Publishers, Reprint.
Neal Larry. 1992 “The Disintegration and Re-integration of International Capital Markets in the Eighteenth Century.” In Business and Economic History 21, edited by William J. Hausman, 84– 96. Williamsburg, VA: Business History Conference, Department of Economics, College of William and Mary,
Neal Larry. “Technological Advance and the Progress of Capital Market Integration in the 19th century.” Unpublished Manuscript, 1992
New York Herald. Various dates.
New York Times. Various dates.
Schmidt H. 1875 Foreign Banking Arbitration: Its Theory and Practice. London: Effingham Wilson, Royal Exchange,
Times (of London). Various dates.