Building Electronic Trading Infrastructures: A Public or Private Responsibility?

Abstract

In this article we analyze the creation of electronic trading infrastructures using electronic data interchange standards and associated technologies. We compare the genesis and evolution of such infrastructures in Denmark, Finland, and Hong Kong. This article analyzes 8 specific attempts to build trading infrastructures in these 3 countries. The article probes how these initiatives support the building efforts by analyzing them with a 2-D framework. The framework distinguishes between the strategic intent of the initiative and the type of initiator. In each case, the dynamics of the initiative and its success are examined. The analysis shows that the building of trading infrastructures can take place through multiple paths-called patterns in this study-and it can be pulled or pushed by multiple forces. As a result, this article draws conclusions on how each pattern can help in building the infrastructure. The analysis demonstrates that the trading infrastructure in Hong Kong has largely emerged through grassroot bricolage. In Finland and Denmark, in contrast, public institutions or state-owned monopolies have played a critical role. On a theoretical level, this study calls for the need to expand the scope of analysis beyond individual adopting organizations when analyzing electronic trading infrastructures, and shows that there is also a need to probe industries and public institutions when studying electronic infrastructure development.