Organizational ecology and interactions between populations: Case of intermediaries in Turkish capital market

In this study, under the Organizational Ecology context, we try to determine the effects of the populations? interactions on the organizational founding rates. The effort to explain the reasons which influence the founding rate, which is part of the organizational ecology, as one organizational population, does not suffice when one more than one population interacts and this interaction affects the founding rates. This kind of interaction has an insufficient effect on founding rates. Besides, organizational forms have special characteristics in the populations and they have some influence on the interactions between populations and founding rates. In this study, we try to solve this kind of problem. In this regard, degree of cognitive legitimation constructed by the different institutional forms and their interaction between together has been examined and their effect on the organizational founding rates has been determined. In this regard, we select the bank originated and nonbank originated intermediary institutions from the Turkish capital market as the overall population. We presume that, bank originated intermediary firms have high degrees of cognitive legitimation, and nonbank originated intermediary firms have low degrees of cognitive legitimation. As the Organizational Ecology context try to explain the interactions between populations under the two basic social process of legitimization and competitiveness, interactions between the intermediary firms are determined by following process. Event history analysis was used to determine the interactions between these two populations. Founding dates, and their transactions on buying and selling treasury bills and common stocks are used as data and their interactions between intermediary populations was used from the very beginning of the Istanbul Stock Exchange?s establishment date of 1986. Financial crises and their negative effects on the markets are determined and taken as the seasonal effects. Founding rate is taken as dependent, and other factors affecting the founding rate are determined as the independent variable. The casual relationship between dependent variable, founding rate, and independent variables are explained by the Cox Proportional Risk Model. Stepwise approach was used in the model. According to the solutions; as long as the volume of the population that highly cognitive banking origin intermediary firms increases, the founding rate of degree of cognitive legitimization of non banking origin intermediary firms decreases. However; the increases in the volume of the population where non banking origin intermediary firms are located do not have an effect on the founding rate of the banking origin intermediary firms. In this context, it is clear that interactions are toward one direction with respect to the dynamics of population. Despite the fact that the change in the amount of the sale of stocks creates a positive effect on the founding rate of non banking origin intermediary firms, the change in sales of government debt securities does not have an effect on the founding rate of banking origin intermediary firms. When we take a look at the seasonal effect, it is determined that particularly the period of financial crises of 2001 and later has an effect which reduces the founding rate of not only banking related intermediary firms but also non banking intermediary firms.