LEARNING AND THE CREATION OF STOCK-MARKET INSTITUTIONS - EVIDENCE FROM THE ROYAL-AFRICAN-COMPANY AND HUDSONS-BAY-COMPANY, 1670-1700

In this article we use a unique source-a 30-year time series of the sh are transactions of two joint-stock companies-to examine the growth of the London capital market prior to and immediately after the Glorious Revolution. We argue that the London experience with open capital mar kets was not solely the result of 1689. Rather it was the learning by private individuals and goldsmith bankers which took place in the deca des before 1689 that allowed the market to take full advantage of the property rights changes which occurred with the change in regimes.