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Competition through innovation : ATMs in Italian banks

Author

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  • Hester,D.D.
  • Calcagnini,G.
  • Bonis,R. de

    (University of Wisconsin-Madison, Social Systems Research Institute)

Abstract

This paper reports results from a study of location, ownership, and acquisitions of automated teller machines (ATMs) by a sample of large Italian banks between 1991 and 1995. The sample banks had 85% of Italian banking assets. Data are collected at the provincial level for each bank. The underlying model is recursive; a bank is presumed to make branching decisions (analyzed in a separate paper) and then, conditional on branching decisions, decisions about ATMs. Several sets of cross-sectional data are studied using OLS and Tobit models yielding the following results: 1) The logarithm of ATMs in a province is related positively to the logarithms of interest-bearing deposits and GDP and negatively to the logarithm of population, as was predicted from a variation of Baumol's transactions demand for cash model; 2) The number of a bank's ATMs in a province is related positively to the numbers of its branches and deposit accounts, a province's per capita GDP, the bank's deposits, and the bank's number of employees per branch in the province and negatively to the bank's share of a province's branches; 3) Changes in a bank's ATMs in a province are positively related to changes in the number of its branches and those of competitors; and 4) Concentration indices of ATMs, branches, deposits, and loans decreased at the provincial level between 1991 and 1995.
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Suggested Citation

  • Hester,D.D. & Calcagnini,G. & Bonis,R. de, 1999. "Competition through innovation : ATMs in Italian banks," Working papers 27, Wisconsin Madison - Social Systems.
    • Handle: RePEc:att:wimass:199927
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    File URL: http://www.ssc.wisc.edu/econ/archive/wp9927.pdf
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    References listed on IDEAS

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    Cited by:

    1. Kim Huynh & Philipp Schmidt-Dengler & Gregor W. Smith & Angelika Welte, 2017. "Adoption Costs of Financial Innovation: Evidence from Italian ATM Cards," Staff Working Papers 17-8, Bank of Canada.
    2. Francesco Columba, 2003. "Transaction Technology Innovation and Demand for Overnight Deposits in Italy," Temi di discussione (Economic working papers) 468, Bank of Italy, Economic Research and International Relations Area.
    3. Giammatteo, Michele & Iezzi, Stefano & Zizza, Roberta, 2022. "Pecunia olet. Cash usage and the underground economy," Journal of Economic Behavior & Organization, Elsevier, vol. 204(C), pages 107-127.
    4. Calcagnini,G. & Bonis,R. de & Hester,D.D., 1999. "Determinants of bank branche expension in Italy," Working papers 32, Wisconsin Madison - Social Systems.
    5. Snellman, Heli, 2006. "Automated teller machine network market structure and cash usage," Scientific Monographs, Bank of Finland, number 2006_038.
    6. Botao Yang & Andrew T. Ching, 2014. "Dynamics of Consumer Adoption of Financial Innovation: The Case of ATM Cards," Management Science, INFORMS, vol. 60(4), pages 903-922, April.
    7. Nicoletta Corrocher, 2002. "Does Internet banking substitute traditional banking? Empirical evidence from Italy," KITeS Working Papers 134, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jul 2002.
    8. Kenneth P. Brevoort & John D. Wolken, 2008. "Does distance matter in banking?," Finance and Economics Discussion Series 2008-34, Board of Governors of the Federal Reserve System (U.S.).
    9. Snellman, Heli, 2006. "Automated teller machine network market structure and cash usage," Bank of Finland Scientific Monographs, Bank of Finland, volume 0, number sm2006_038.
    10. repec:zbw:bofism:2006_038 is not listed on IDEAS
    11. Corrocher, Nicoletta, 2006. "Internet adoption in Italian banks: An empirical investigation," Research Policy, Elsevier, vol. 35(4), pages 533-544, May.
    12. Kamalpreet Kaur & Mandeep Kaur, 2020. "Determinants of Diffusion and Adoption of ATM cum Debit Cards in Indian Banking Sector," Global Business Review, International Management Institute, vol. 21(5), pages 1263-1278, October.
    13. Lorenzo Ciari & Riccardo De Bonis, 2011. "Entry decisions after deregulation: the role of incumbents' market power," Mo.Fi.R. Working Papers 50, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.

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