Catching the wave: Alertness, responsiveness, and market influence in global electronic networks

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Abstract

This paper introduces the concepts of alertness and responsiveness as key capabilities for firms in fast-moving, information-intensive environments such as global currency trading. Hypotheses drawn from the resource-based view of the firm, from network theory, and from Austrian economics are tested on objective cross-section and time-series data for the population of 4,088 banks engaged in foreign-exchange trading on the Reuters dealing system. Results strongly support the hypotheses that banks that are alert, i.e., use their information networks in ways that expand the range of information they are exposed to, and responsive - those that act quickly in volatile markets - tend to exercise greater market influence in this industry.

Original languageEnglish (US)
Pages (from-to)1493-1509
Number of pages17
JournalManagement Science
Volume43
Issue number11
DOIs
StatePublished - Nov 1997

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Keywords

  • Alertness
  • Austrian Economics
  • Capabilities
  • Currency Trading
  • Electronic Networks
  • Financial Services
  • Network Theory
  • Resource-Based View
  • Responsiveness

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