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Does Technology Lead to Better Financial Performance? A Study of Indian Commercial Banks

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  • Dhiraj Sharma

    (School of Management Studies, Punjabi University, India)

Abstract

It has been a matter of debate whether Technology provides better financial results and improves productivity. The present paper attempts to study the inter-group comparison of financial performance of Indian banks by classifying the banks on the basis of usage of Technology. Further, for the purpose of temporal comparison, the period for the study has been divided into two parts, i. e. low technology induction period and high technology induction period. Findings of the paper show that the fully IT oriented banks are financially better off than the partially IT oriented banks. Moreover, the performance of almost all the banks under study has tremendously improved in the high technology induction period. However, for the Indian banking industry, the correlation between Technology induction and financial productivity is negative though statistically insignificant and low.

Suggested Citation

  • Dhiraj Sharma, 2012. "Does Technology Lead to Better Financial Performance? A Study of Indian Commercial Banks," Managing Global Transitions, University of Primorska, Faculty of Management Koper, vol. 10(1 (Spring), pages 3-28.
  • Handle: RePEc:mgt:youmgt:v:10:y:2012:i:1:p:003-028
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    File URL: http://www.fm-kp.si/zalozba/ISSN/1581-6311/10_003-028.pdf
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    References listed on IDEAS

    as
    1. K. R. Shanmugam & A. Das, 2004. "Efficiency of Indian commercial banks during the reform period," Applied Financial Economics, Taylor & Francis Journals, vol. 14(9), pages 681-686.
    2. Jitendra Kumar Mishra,, 2007. "Constituent Dimensions Of Customer Satisfaction: A Study Of Nationalised And Private Banks," Revista Tinerilor Economisti (The Young Economists Journal), University of Craiova, Faculty of Economics and Business Administration, vol. 1(8), pages 40-47, April.
    3. Sarkar, Jayati & Sarkar, Subrata & Bhaumik, Sumon K., 1998. "Does Ownership Always Matter?--Evidence from the Indian Banking Industry," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 262-281, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    IT productivity paradox; information technology; financial performance; indian banks; spread and burden ratios;

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management

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