Industry case studies for testing and refining the electronic markets hypothesis

As information technology has become a prominent feature in business transactions over the past several decades, one can view its impact by analyzing how firms and their respective industries have organized (or reorganized) in order to conduct business. The purpose of this study is to analyze the electronic markets hypothesis (EMH) (Malone, Yates and Benjamin 1987), a heavily cited theory and the domain of Hess and Kemerer's (1994) award-winning MIS Quarterly article. Malone et al.'s and Hess and Kemerer's work have been instrumental in shaping e-commerce research and corporate strategies over the last decade. However, even after Hess and Kemerer's study failed to validate the EMH, there have been few attempts to empirically test the theory, despite the fact that many scholarly papers citing the EMH simply presume that the theory is valid. Accordingly, this dissertation is a set of positivist case studies that use hypothetico-deductive logic to empirically test the EMH's propositions (as conceptualized by Malone et al.). This qualitative study is both a follow-up to Hess and Kemerer's test of the EMH in the home mortgage industry and a new test in a different (but related) industry, residential real estate.;In order to create a working model for this study, it was necessary to explicitly conceptualize the variables posited by the EMH, and this analysis of Malone et al.'s theory is a major contribution to the electronic markets literature. The results of this research generally confirm the EMH in both industries, but there is one proposition of the model where the evidence is not wholeheartedly consistent with the theory's predictions. This inconsistency is relatively minor, however. Hence the overall conclusion for this study is that the EMH has been generally confirmed and that the EMH model developed for this test is plausible. Moreover a refinement to the EMH model is proposed to reflect the omission of the one proposition that was not solidly confirmed. In addition an enhanced version of the EMH exclusively for consumer products is developed. Evidence from the literature and from this dissertation's case studies supports this proposed B2C EMH Model.