2 Policy as Myth and Ceremony ?

We examine the antecedents and consequences of creating a national stock exchange among developing countries, a core technology of financial globalization. We study local conditions and global institutional pressures in the rapid spread of exchanges since the 1980s, and examine how conditions at the point of adoption affected their subsequent vibrancy. Little prior research connects the process of diffusion with the operational performance of adopted policies. We find that international coercion was associated with more ceremonial adoption, but contrary to expectations common in institutional research, contagion processes via peer groups and normative emulation of prestigious actors enhanced vibrancy.