Strategic Competitive Advantages through Enterprise Systems: The Case of Exchange Systems

12 Pages Posted: 16 Aug 2019

See all articles by Martin Haferkorn

Martin Haferkorn

European Securities and Markets Authority (ESMA); Goethe University Frankfurt Faculty of Economics and Business Administration

Michael Siering

Goethe University Frankfurt Faculty of Economics and Business Administration

Kai Zimmermann

Goethe University Frankfurt Faculty of Economics and Business Administration

Date Written: August 13, 2019

Abstract

Enterprise Systems play a key role in securities trading. Exchange operators spend great effort in overhauling their IT-infrastructure to satisfy the needs of market participants who require faster and more resilient order management cycles. Previous studies have disregarded the question whether such specific IT-investments lead to competitive advantages. Against this background, we empirically analyze the impact of exchange system upgrades on the market share of the respective exchange. Using a benchmarking approach against the closest competitor, we find that exchange system overhauls significantly increase the attracted trading volume. We conclude that investments in enterprise systems provide benefits and lead to competitive advantages for the upgrading firm.

Keywords: Strategic IT Advantage, Enterprise Systems, Exchange Systems, Execution Speed

JEL Classification: M21

Suggested Citation

Haferkorn, Martin and Siering, Michael and Zimmermann, Kai, Strategic Competitive Advantages through Enterprise Systems: The Case of Exchange Systems (August 13, 2019). Available at SSRN: https://ssrn.com/abstract=3436690 or http://dx.doi.org/10.2139/ssrn.3436690

Martin Haferkorn (Contact Author)

European Securities and Markets Authority (ESMA) ( email )

201-203 Rue de Bercy
​Paris, 75012
France

Goethe University Frankfurt Faculty of Economics and Business Administration ( email )

Theodor-W.-Adorno-Platz 4
Frankfurt am Main, 60323
Germany

Michael Siering

Goethe University Frankfurt Faculty of Economics and Business Administration ( email )

Grueneburgplatz 1
Frankfurt am Main, 60323
Germany

Kai Zimmermann

Goethe University Frankfurt Faculty of Economics and Business Administration ( email )

Grueneburgplatz 1
Frankfurt am Main, 60323
Germany

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