The social shaping of electronic metals exchanges: an institutional theory perspective

Abstract

PurposeThe purpose of this article is to examine the structures and business models of electronic metals exchanges between 1995 and 2003.Design/methodology/approachA dialectical institutional analysis is applied to understand the exchanges’ responses to competing pressures for efficiency and legitimacy.FindingsAlthough efficiency is enabled by internet technologies that provide greater information transparency and access, public metals exchanges exhibited less ability to survive than private exchanges. It is argued that private exchanges survived because traders regarded them as more legitimate. Private exchange models allowed existing traditional relationships involving trust and privacy to continue, whereas public exchanges did not.Originality/valueThe institutional analysis complements economic analyses of the role and structure of intermediaries in B2B electronic commerce.