An examination of the electronic market hypothesis in the US home mortgage industry

Abstract

Purpose – The purpose of this paper is to longitudinally test the propositions of the Electronic Market Hypothesis (EMH) within the context of the US home mortgage industry.Design/methodology/approach – The paper uses a deductive, positivist case study, through a systematic examination of “texts” in the trade press over three time periods: 1995‐1999, 2000‐2002, and 2003‐2007.Findings – EMH propositions, while generally not found to be valid in the early years, were more consistent with evidence in the home mortgage industry in the later period.Research limitations/implications – Throws fresh light on the debate between the appropriateness and the inappropriateness of the EMH as a core theory explaining the influence of Information Technology on market and industry structures.Practical implications – Designing of corporate strategies to foster efficient market mechanisms.Originality/value – Using a relatively uncommon (analysis of primary data from trade press articles) qualitative research methodology whi...