Financial markets diffusion patterns. The case of Mexican investment funds

  • Adam Marszk Gdansk University of Technology
  • Ewa Lechman Gdansk University of Technology
  • Harleen Kaur Jamia Hamdard University


Research background: Exchange traded funds (ETFs) are one of the most influential financial innovations, reshaping the investment funds market in many countries, including Mexico. Due to their similar investment objectives, ETFs are considered substitutes for mutual funds.
Purpose of the article: The aim of the article is to provide an indepth insight into the issues associated with the development of financial markets in Mexico over the period 2002-2012, putting special emphasis on the development patterns of ETFs.
Methods: First we use descriptive statistics to unveil basic changes and trends in the Mexican investment funds (ETFs and mutual funds). Then we use a category of the innovation diffusion models, i.e. logistic growth models, in order to explore the key development patterns. Data sources and methodological framework are presented in the second section of the article, with a detailed description of the innovation diffusion models applied in the research (based on 3-parametric logistic curve). The sum of assets under management of ETFs and mutual funds is considered as the size of the total investment funds market.
Findings and Value added: Empirical findings indicate a significant development of the ETF market, both in terms of assets under management and market share. According to the presented estimations, Mexican ETF market development can be described with the logistic growth models, and three characteristic phases of the logistic curve were clearly observable. The predicted ETF market development patterns point towards a further increase of the market share of ETFs over the next 3-5 years, yet the probability of exceeding the level of ca. 20-30% seems low.


Agapova, A. (2011). Conventional mutual index funds versus exchange-traded funds. Journal of Financial Markets, 14(2). doi: 10.1016/j.finmar.2010.10.005.
Deville, L. (2008). Exchange traded funds: history, trading and research. In M. Doumpos, P. Pardalos & C. Zopounidis (Eds.). Handbook of financial engineering. Springer. doi: 10.1007/978-0-387-76682-9_4.
BlackRock (2011). ETF landscape: Latin America industry review.
BlackRock (2012). ETP landscape – global handbook 2012.
Financial stability board (2011). Potential financial stability issues arising from recent trends in Exchange-Traded Funds (ETFs). Basel.
Geroski, P. A. (2000). Models of technology diffusion. Research Policy, 29(4). doi: 10.1016/S0048-7333(99)00092-X.
Gomulka, S. (2006). The theory of technological change and economic growth. Routledge.
International Monetary Fund (2011). Global financial stability report: durable financial stability. Getting there from here. Washington, DC.
Investment Company Institute (2008). Investment Company Fact Book 2008. Washington, DC.
Investment Company Institute (2013). Investment company fact book 2012. Washington, DC.
Investment Company Institute (2015). Investment company fact book 2015. Washington, DC.
Kosev, M. & Williams, T. (2011). Exchange-traded Funds. Reserve Bank of Australia Bulletin. March Quarter.
Kucharavy, D. & De Guio, R. (2011). Logistic substitution model and technological forecasting. Procedia Engineering, 9. doi: 10.1016/j.proeng.2011.03.129.
Kwasnicki, W. (2013). Logistic growth of the global economy and competitiveness of nations. Technological Forecasting and Social Change, 80(1). doi: 10.1016/j.techfore.2012.07.007.
Lechman, E. (2015). ICT diffusion in developing countries: towards a new concept of technological takeoff. Springer. doi: 10.1007/978-3-319-18254-4.
Lechman, E. & Marszk, A. (2015). ICT technologies and financial innovations: the case of exchange traded funds in Brazil, Japan, Mexico, South Korea and the United States. Technological Forecasting and Social Change, 99. doi: 10.1016/j.techfore.2015.01.006.
Mansfield, E. (1968). The economies of technological change. New York: WW Norton.
Marszk, A. (2014). Exchange traded funds (ETFs) on emerging markets. In M. Buszko, A. Huterska & D. Piotrowski (Eds.). Perspective: challenges of modern finance and banking. Toruń: Nicolaus Copernicus University in Toruń Publishing.
Meyer, P. S., Yung, J. W. & Ausubel, J. H. (1999). A primer on logistic growth and substitution: the mathematics of the Loglet Lab software. Technological Forecasting and Social Change, 61. doi: 10.1016/S0040-1625(99)00021-9.
Ramaswamy, S. (2011). Market structures and systematic risks of exchange-traded funds. BIS Working Papers, 343.
Rogers, E. M. (2010). Diffusion of innovations. Simon and Schuster.
Satoh, D. (2001). A discrete bass model and its parameter estimation. Journal of the Operations Research Society of Japan-Keiei Kagaku, 44(1).
Srinivasan, V. & Mason, C. H. (1986). Technical note-nonlinear least squares estimation of new product diffusion models. Marketing Science, 5(2). doi: 10.1287/mksc.5.2.169.
Srivastava, V. K. L. & Rao, B. B. (1990). The econometrics of disequilibrium models (Vol. 111). Greenwood Publishing Group.
World Federation of Exchanges (2015). WFE Database. London.
How to Cite
Marszk, A., Lechman, E., & Kaur, H. (2017). Financial markets diffusion patterns. The case of Mexican investment funds. Equilibrium. Quarterly Journal Of Economics And Economic Policy, 12(1), 83-100. doi:10.24136/eq.v12i1.5
Financial markets