Gerard Llobet () (CEMFI, Centro de Estudios Monetarios y Financieros) Rubén Hernández-Murillo () (Federal Reserve Bank of St. Louis) Roberto Fuentes (Farmaindustria)
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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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Paper provided by CEMFI in its series Working Papers with number
wp2008_0813.
Find related papers by JEL classification: O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis
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