More on adoption criteria of revolutionary business techniques: the case of ETFs

What is it about?

In an earlier paper (Brockhoff 2023), it was shown that “revolutionary” business techniques were adopted upon recognizing three jointly available facts: An effective solution to a business problem. A controllable and efficient solution process or software. An appropriate type of hardware to apply the software to the problem. In addition, the adoption decisions can be supported or spurred by easily recognizable extensions of the specific technique beyond the original business problem it serves. These adoption criteria were developed from studying compound interest, option pricing, and conjoint measurement as examples of revolutionary business techniques. The criteria are largely independent of each other, such that one could not be substituted for another. This paper studies whether those findings apply to yet another revolutionary business technique, the ETFs. Historical analysis is used for explicating the theoretical foundations of ETFs. The earlier findings are corroborated.

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