IT-Driven Execution Opportunities in Securities Trading: Insights into the Innovation Adoption of Institutional Investors

Technological innovations change the intermediation relationships within securities trading. Thus, the question arises which factors drive or hinder their adoption. This paper develops a model to evaluate institutional investors' intentions to adopt the meta-technology we call non-delegated order handling. It focuses on the usage of IT-driven trading systems which enable investors to control the choice of trading venue, order slicing, and timing themselves instead of delegating the execution of stock trading to an intermediary. Therefore the theory of task-technology-fit is integrated into the technology acceptance model. Further, it was successfully tested on data from the largest European institutional investors. The results outline that the perceived fit among the system‟s capabilities and individual trading requirements is the main driver for adoption. Secondly, performance expectations fuel the intention to use trading innovations. Thirdly, for the expected efforts only a weak effect could be shown. Finally, factors like contractual barriers and competitive pressure which investors cannot control do not substantially affect their adoption decision.