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Strategic online-banking adoption

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  • Roberto Fuentes
  • Rubén Hernández-Murillo
  • Gerard Llobet

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 2003-2005, we show that although bank-specific characteristics are important determinants of banks’ adoption decision, competition 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.

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Bibliographic Info

Paper provided by Federal Reserve Bank of St. Louis in its series Working Papers with number 2006-058.

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Date of creation: 2007
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Handle: RePEc:fip:fedlwp:2006-058

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Keywords: Internet banking;

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Citations

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Cited by:
  1. John Goddard & Donal McKillop & John Wilson, 2009. "Which Credit Unions are Acquired?," Journal of Financial Services Research, Springer, Springer, vol. 36(2), pages 231-252, December.
  2. Richard J. Sullivan & Zhu Wang, 2005. "Internet banking: an exploration in technology diffusion and impact," Payments System Research Working Paper, Federal Reserve Bank of Kansas City PSR WP 05-05, Federal Reserve Bank of Kansas City.
  3. 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.
  4. W. Scott Frame & Lawrence J. White, 2014. "Technological Change, Financial Innovation, and Diffusion in Banking," Working Papers, New York University, Leonard N. Stern School of Business, Department of Economics 14-02, New York University, Leonard N. Stern School of Business, Department of Economics.
  5. Sumit Agarwal & Robert Hauswald, 2008. "The choice between arm's-length and relationship debt: evidence from e-loans," Working Paper Series, Federal Reserve Bank of Chicago WP-08-10, Federal Reserve Bank of Chicago.
  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. Paul Cavelaars & Joost Passenier, 2012. "Follow the money: what does the literature on banking tell prudential supervisors on bank business models?," DNB Working Papers, Netherlands Central Bank, Research Department 336, Netherlands Central Bank, Research Department.

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