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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. |
