The interaction between face-to-face and electronic delivery: the case of the Italian banking industry
We empirically investigate the relevance of demand-side complementarity between electronic and traditional provision of banking services. Since no systematic data on prices for the two types of services is available, it is not possible to estimate cross-elasticities of demand. We resort to two indirect tests. The first test is based on estimating the relationship between branches and the diffusion of e-banking services in local markets, controlling for individual bank and market characteristics employing new data for Italian banks referring to 1998-2001. We find that banks expanded relatively more in the e-business in those local markets where they had relatively fewer branches, with the exclusion of markets where the banks were chartered. The second test is based on measuring the impact of the joint provision of banking services - electronically and at traditional branches - on banksï¿½ revenues per customer. We estimate a non-standard revenue function that relates revenues from asset management, brokerage and payment services to the share of customers employing e-banking, given the total number of bank customers. Our results show that a high share of e-customers is associated with a reduction in revenues per customer. This evidence suggests that banks did not extract substantial consumer surplus from the joint provision of electronic services and traditional services at the branch. We interpret the results of both our test as not consistent with the hypothesis of complementarity between stores and e-commerce in the banking industry.
|Date of creation:||Jul 2004|
|Contact details of provider:|| Postal: Via Nazionale, 91 - 00184 Roma|
Web page: http://www.bancaditalia.it
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Franklin Allen & James McAndrews & Philip Strahan, 2002.
"E-Finance: An Introduction,"
Journal of Financial Services Research,
Springer;Western Finance Association, vol. 22(1), pages 5-27, August.
- Franklin Allen & James McAndrews & Philip Strahan, 2001. "E-Finance: An Introduction," Center for Financial Institutions Working Papers 01-36, Wharton School Center for Financial Institutions, University of Pennsylvania.
- Evanoff, Douglas D, 1988. "Branch Banking and Service Accessibility," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 20(2), pages 191-202, May.
- Cannari Luigi & D'Alessio G., 2002. "La distribuzione del reddito e della ricchezza nelle regioni italiane," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 4, pages 809-848.
- Luigi Cannari & Giovanni D'Alessio, 2003. "La distribuzione del reddito e della ricchezza nelle regioni italiane," Temi di discussione (Economic working papers) 482, Bank of Italy, Economic Research and International Relations Area.
- Berger, Allen N, 2003. " The Economic Effects of Technological Progress: Evidence from the Banking Industry," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 35(2), pages 141-176, April.
- Allen N. Berger, 2002. "The economic effects of technological progress: evidence from the banking industry," Finance and Economics Discussion Series 2002-50, Board of Governors of the Federal Reserve System (U.S.).
- Berlin, Mitchell & Mester, Loretta J, 1999. "Deposits and Relationship Lending," Review of Financial Studies, Society for Financial Studies, vol. 12(3), pages 579-607.
- Mitchell Berlin & Loretta J. Mester, 1997. "Deposits and relationship lending," Working Papers 96-18, Federal Reserve Bank of Philadelphia.
- Mitchell Berlin & Loretta J. Mester, 1998. "Deposits and relationship lending," Working Papers 98-22, Federal Reserve Bank of Philadelphia.
- Anil K. Kashyap & Raghuram Rajan & Jeremy C. Stein, 2002. "Banks as Liquidity Providers: An Explanation for the Coexistence of Lending and Deposit-Taking," Journal of Finance, American Finance Association, vol. 57(1), pages 33-73, 02.
- Anil K. Kashyap & Raghuram G. Rajan & Jeremy C. Stein, 1998. "Banks as liquidity providers: an explanation for the co-existence of lending and deposit-taking," Proceedings 582, Federal Reserve Bank of Chicago.
- Anil K. Kashyap & Raghuram Rajan & Jeremy C. Stein, 1999. "Banks as Liquidity Providers: An Explanation for the Co-Existence of Lending and Deposit-Taking," NBER Working Papers 6962, National Bureau of Economic Research, Inc.
- Berger, Allen N. & Humphrey, David B. & Pulley, Lawrence B., 1996. "Do consumers pay for one-stop banking? Evidence from an alternative revenue function," Journal of Banking & Finance, Elsevier, vol. 20(9), pages 1601-1621, November.
- Fredric S. Mishkin & Philip E. Strahan, 1999. "What Will Technology Do to Financial Structure?," NBER Working Papers 6892, National Bureau of Economic Research, Inc.
- Furst, Karen & Lang, William & Nolle, Daniel, 2001. "Internet banking in the U.S.: landscape, prospects, industry implications," Journal of Financial Transformation, Capco Institute, vol. 2, pages 45-52.
- Stijn Claessens & Thomas Glaessner & Daniela Klingebiel, 2002. "Electronic Finance: Reshaping the Financial Landscape Around the World," Journal of Financial Services Research, Springer;Western Finance Association, vol. 22(1), pages 29-61, August.
- Setsuya Sato & John Hawkins, 2001. "Electronic finance: an overview of the issues," BIS Papers chapters,in: Bank for International Settlements (ed.), Electronic finance: a new perspective and challenges, volume 7, pages 1-12 Bank for International Settlements.
- Richard J. Sullivan, 2001. "Performance and operation of commercial bank web sites," Financial Industry Perspectives, Federal Reserve Bank of Kansas City, issue Dec, pages 23-33.
- Richard J. Sullivan, 2000. "How has the adoption of Internet banking affected performance and risk in banks?," Financial Industry Perspectives, Federal Reserve Bank of Kansas City, issue Dec, pages 1-16.
- S. Illeris & G. Akehurst, 2002. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 22(1), pages 1-3, January.
- George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213-213.
- Eric K. Clemons & Lorin M. Hitt, 2000. "The Internet and the Future of Financial Services: Transparency, Differential Pricing and Disintermediation," Center for Financial Institutions Working Papers 00-35, Wharton School Center for Financial Institutions, University of Pennsylvania. Full references (including those not matched with items on IDEAS)