Who Can Start a Stock Exchange? Silent Legitimacy, Mundane Materiality, and the Genesis of Markets

Roscoe, Philip; Mason, Katy Jane

Abstract

This study presents an account of the genesis and development of two stock markets established in London in 1995. It draws on elite interviews and documentary sources to explore how the founders of these markets sought to legitimize them as stable and durable venues for security trade. The analysis accounts for the success of one market, AIM, which adopted a novel organisation and became a model for growth company markets worldwide, and the failure of the other, OFEX, despite a strategy of isomorphic conformity to the expected norms of market operation. The study uses insights from the STS- inflected study of markets to present an account of legitimacy as embedded in taken-for-granted socio-material structures. We term this phenomenon ‘silent legitimacy’. The successful market was supported by such silent legitimacy, which outweighed the ostensive strategy of isomorphic regulatory and procedural legitimacy followed by its rival. Contributing to a nascent ‘material turn’ in institutional theory, the study argues that the markets-as-institutions literature can be strengthened through theoretical engagement with the market- studies literature and empirical attention to the mundane material dimensions of institutional fields."

• Presentation Conference Type: Conference Paper (published)
• Conference Name: 80th Annual Meeting of the Academy of Management
• Start Date: Aug 7, 2020
• End Date: Aug 11, 2020
• Acceptance Date: Aug 31, 2020
• Publication Date: 2020-08
• Deposit Date: Feb 13, 2025
• Journal: Academy of Management Proceedings
• Print ISSN: 0065-0668
• Electronic ISSN: 2151-6561
• Publisher: Academy of Management
• Peer Reviewed: Peer Reviewed
• Volume: 2020
• Issue: 1
• Pages: 11521
• DOI: https://doi.org/10.5465/ambpp.2020.111