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Are Financial Markets a Danger or an Opportunity to Industry? Lessons from a Forgotten Episode of History of the Paris Bourse

Pierre-Cyrille Hautcœur École des hautes études en sciences sociales (EHESS) ; École d’économie de Paris (EEP).

This article analyses the history of the relationship between manufacturing industries and financial markets in 19th century France. It shows that most industries didn’t want to get financed by issuing new securities on stock markets, except in the few sectors where initial investments were very important. Progressively, shareholders requiring more liquidity for their portfolios obtain the listing of more firms. They face a market structure that does not satisfy them: the official Paris market – the Parquet – is not very open to manufacturing firms’ securities; provincial stock exchanges are little liquid; the Paris semi-illegal market – the Coulisse – appears too risky for prudent entrepreneurs. The reforms of the Parisian financial centre between 1893 and 1898 contribute to solving this dilemma by providing a safe and active market open to manufacturing shares.

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