Policy as myth and ceremony? the global spread of stock exchanges, 1980-2005

We examine the antecedents and consequences in developing countries of creating a national stock exchange, a core technology of financial globalization. We study local conditions and global institutional pressures in the rapid spread of exchanges since the 1980s and examine how conditions at the point of adoption affected exchanges' subsequent vibrancy. Little prior research connects the process of diffusion with the operational performance of adopted policies. We find that international coercion was associated with more ceremonial adoption but that, contrary to expectations common in institutional research, contagion processes via peer groups and normative emulation of prestigious actors enhanced vibrancy.