Institutional Legitimacy and New Market Emergence: the Case of Bitcoin Trading

Presenter Information

Andrew Jay Isaak, Heinrich-Heine University of DüsseldorfFollow
Suleika Bort, University of PassauFollow
Michael Woywode, University of MannheimFollow

Paper Number

1690

Paper Type

short

Description

Research has shown that cognitive, normative, and regulative legitimacy are important for new market emergence. Little known, however, are the conditions and dynamics under which these three forms of legitimacy interact over time and in different institutional settings. In this study, we investigate the emergence and development of the new market for cryptocurrencies (i.e., Bitcoin) using a comprehensive dataset on trading in 49 countries between 2010 and 2020. Our study reveals that all three forms of legitimacy drive Bitcoin trading. Surprisingly, we also found increases in trading volume when Bitcoin was declared illegal and when normative support preceded, rather than followed, regulative legitimacy. Our results shed light on the relationship between cognitive, normative, and regulative legitimacy and their interactions in the emergence and development of a new contested market over time.

Comments

08-Block

Recommended Citation

Isaak, Andrew Jay; Bort, Suleika; and Woywode, Michael, "Institutional Legitimacy and New Market Emergence: the Case of Bitcoin Trading" (2021). ICIS 2021 Proceedings. 9.
https://aisel.aisnet.org/icis2021/fintech/fintech/9