Regulatory Law, Markets, and the Constitution of a Field: Going Public in Fiji

• In Event: 355 - Section on Economic Sociology Roundtable Session (one-hour).
  In Refereed Roundtable: Table 12. Inequality and Development

Abstract

Popular understandings see law and regulation as burdens that firms seek to avoid. In line with such understandings, people may point to how the expansion of disclosure and certification requirements in recent years has coincided with a decline in publicly-listed companies in developed markets. Yet, the growth of stock exchanges in developing countries coincides with the establishment of new regulatory regimes, providing an opportunity to examine questions about the place of regulation in markets. How do firms that could list on the public, regulated exchanges assess regulation and markets? By drawing on a strategic action field framework, this paper views the question from the perspective of firm identity and recruitment. I draw on data from in-depth interviews with CEOs, CFOs, and other directors of 16 private or non-listed public companies in Fiji, a country in which an emergent stock exchange has grown slowly during the past 15 years. These firm leaders understand becoming publicly listed as an identity-changing mark of maturity, trustworthiness, and status and that regulatory requirements, including disclosure, provide such status. They view the law endogenous to this field as a source of benefits. Yet, this law remains subordinated to a broader vision of a proper market. Notwithstanding firm leaders’ positive assessments of the regulatory framework of the exchange, they see the market as lacking the vibrancy of the broader field of financial markets. These firms remain outside a voluntary regulatory regime not because the resist regulation or the market, but because they view the market as insufficiently market-like.

Author

• Erik W. Larson, Macalester College