Speciation in nascent markets

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The construction of market infrastructure is a key component of market formation. In this article, we explore when and how this process leads to the fragmentation of a nascent market. We study the emergence of new markets in the context of social and impact investing in the UK during the period 1999-2019. We identify a recursive process of building the cultural and material infrastructure of the market, which we label cultural and material scaffolding, that drives collective learning by envisioning alternative futures and conducting institutional trials. We show how this scaffolding process explains the split between the social investment and the impact investment markets, which we theorize as market speciation. We identify two scope conditions under which we expect speciation to occur: field overlap and material anchoring. The paper contributes to the literature on market formation, and to the empirical understanding of how social and impact investment have emerged.
Bibliographic citation: CASASNOVAS, G., FERRARO, F. (2022). Speciation in nascent markets. Collective learning through cultural and material scaffolding. Organization Studies, 43 (6), 829-860. doi:10.1177/01708406211031733.

Reference: 10.1177/01708406211031733 (DOI)
Date: 01/06/2022
Author(s): Guillermo Casasnovas; Fabrizio Ferraro
Document type: Article in Journal (refereed)
Department: Strategic Management
Languages: English