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Strategic Online-Banking Adoption

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  • Gerard Llobet

    ()
    (CEMFI, Centro de Estudios Monetarios y Financieros)

  • Rubén Hernández-Murillo

    ()
    (Federal Reserve Bank of St. Louis)

  • Roberto Fuentes

    (Farmaindustria)

Abstract

In this paper we study the determinants of banks’ decision to adopt a transactional website for their customers. Using a panel of commercial banks in the United States for the period 2003-2006, we show that although bank-specific characteristics are important determinants of banks’ adoption decisions, competition also plays a prominent role. The extent of competition is related to the geographical overlap of banks in different markets and their relative market share in terms of deposits. In more competitive markets banks are more likely to adopt earlier. Even more importantly, banks adopt earlier in markets where their competitors have already adopted. In order to construct the different local markets, this paper is one of the first that makes use of the geographic market definitions delimited by the Cassidi® Database compiled by the Federal Reserve Bank of St. Louis.

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Bibliographic Info

Paper provided by CEMFI in its series Working Papers with number wp2008_0813.

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Date of creation: Sep 2008
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Handle: RePEc:cmf:wpaper:wp2008_0813

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Keywords: Duration models; technological adoptacion; online banking; competition.;

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References

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Citations

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Cited by:
  1. Paul Cavelaars & Joost Passenier, 2012. "Follow the money: what does the literature on banking tell prudential supervisors on bank business models?," DNB Working Papers 336, Netherlands Central Bank, Research Department.
  2. Rosu Anca Maria, 2011. "Adoption Of E-Banking In Romania: An Exploratory Study," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2), pages 785-790, December.
  3. Richard Sullivan & Zhu Wang, 2013. "Internet banking: an exploration in technology diffusion and impact," Working Paper 13-10, Federal Reserve Bank of Richmond.
  4. W. Scott Frame & Lawrence J. White, 2014. "Technological Change, Financial Innovation, and Diffusion in Banking," Working Papers 14-02, New York University, Leonard N. Stern School of Business, Department of Economics.
  5. John Goddard & Donal McKillop & John Wilson, 2009. "Which Credit Unions are Acquired?," Journal of Financial Services Research, Springer, vol. 36(2), pages 231-252, December.
  6. Arnold, Ivo J.M. & van Ewijk, Saskia E., 2011. "Can pure play internet banking survive the credit crisis?," Journal of Banking & Finance, Elsevier, vol. 35(4), pages 783-793, April.
  7. Herrera, Helios & Schroth, Enrique, 2011. "Advantageous innovation and imitation in the underwriting market for corporate securities," Journal of Banking & Finance, Elsevier, vol. 35(5), pages 1097-1113, May.
  8. Sumit Agarwal & Robert Hauswald, 2008. "The choice between arm's-length and relationship debt: evidence from e-loans," Working Paper Series WP-08-10, Federal Reserve Bank of Chicago.

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