Indispensable Market Development Agents: Inter-Industrial Networks and the Rise of Securitization Markets

• In Event: 571 - Section on Economic Sociology Roundtables (one-hour)
  In Refereed Roundtable: Table 08. Networks among Firms and Economic Partners

Abstract

Sociologists have long observed that markets are embedded in social structures, and have studied buyers, sellers, and the state in order to better understand them. However, many of the most significant types of actors responsible for the creation and development of various financial markets are often overlooked, perhaps due to their relative lack of visibility during times of perceived market stability and limited data. Drawing on historical-comparative, interviews, and participant-observation, this article presents a new explanation for market institutionalization, one that emphasizes the orientation, networks, and roles of what I refer to as “market development agents.” In order to create and develop new securitization financial markets, these agents 1) create strategic inter-industrial linkages, 2) negotiate definitions and basic principles (cognitive framing), 3) collaborate with others within their host firms and industries to develop their part of the market framework (resource deployment), and 4) reconnect with their counterparts across industrial and organizational divides to popularize and defend the market (boundary-spanning networks). This activity not only facilitates the exchange of financial securities, but also allows these market-development agents to gain prominence along with the markets they institutionalize. Identifying and understanding the actors, groups of actors, and actions related to market development will inform our understanding of these markets, as well as weaknesses and consequences.

Author

• David C. Lubin, University of Chicago