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Markets for Sale: Causes and Consequences of Stock Exchange Demutualization

Markets for Sale: Causes and Consequences of Stock Exchange Demutualization. Helen Callaghan, (MPIfG) Paul Lagneau-Ymonet, (Paris-Dauphine) Angelo Riva (EBS-Paris & IDHE Paris- Ouest -La-Defense). Research Agenda: What drives change in capitalist social systems?. => Streeck 2009:

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Markets for Sale: Causes and Consequences of Stock Exchange Demutualization

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  1. Markets for Sale: Causes and Consequences of Stock Exchange Demutualization Helen Callaghan, (MPIfG) Paul Lagneau-Ymonet, (Paris-Dauphine) Angelo Riva (EBS-Paris & IDHE Paris-Ouest-La-Defense)

  2. Research Agenda: What drives change in capitalist social systems? • => Streeck 2009: • move beyond abstract labels to identify mechanisms of change in specific historical contexts. • Focus on competition and innovation • Our case study: Stock market demutualization in France and Germany, 1980-2010 • Findings: • Innovation as one resource among others • Competition as “rule of the game” • Political agency as the crucial initiator

  3. Background (2): What is demutualization, and why does it matter? Traditional governance structure New governance structure “Williamsonian”: Separation of ownership rights from membership rights conversion of membership rights into common stock holdings “Durkheimian”: • Ownership by users (mainly financial intermediaries) • Self-governance and self-regulation by user-owners Demutualization as a three-step process • The incorporation; • The IPO; • The sell of their shares by the former owners-users.

  4. Illustration: Demutualization in Germany Significance of strategic investors in the ownership structure of Deutsche Börse Group Significance of Anglo-American Investors in the Ownership Structure of Deutsche Börse Group

  5. Illustration: Demutualization in France

  6. Mainstream explanations and their limits • Standard three-level rationale: • normative optimality of market coordination (Ansidei 2001; Ramos 2003) • IT-revolution (Schwartz et alii 2009)

  7. Case study: the political economic constitution of markets for markets in France and Germany

  8. Conclusion: Lessons from the case study • At the policy-making level: A “sorcerer’s apprentice” sequence • At the industry level: The failure of “efficiency through competition” • At the organizational level: The end of exchanges? • About the drivers of change in capitalist systems: • Political agencyshaped the competitive arena in which technological innovation was one resource among others

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