The Effect of New Technology in Payment Services on Banks' Intermediation
In many countries, payment services in banking have shifted from paper-based giro and check payments to electronic giro and debit card payments. This paper analyses the effect of this change in payment technology within a multiple-output framework using Norwegian bank level panel data. The dual approach with four variable inputs is applied, and the general model includes random coefficients to capture heterogeneity in the production technology across banks. The results show that the move towards electronic payment services has (i) decreased average costs, (ii) increased the economies of scale in the production of deposits more than in the production of loans, and (iii) affected input demand asymmetric. The input ratio between labour and both physical capital and materials have decreased.
|Date of creation:||Mar 2002|
|Contact details of provider:|| |
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.:
- Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
- Erik Biørn & Kjersti-Gro Lindquist & Terje Skjerpen, 2002.
"Heterogeneity in Returns to Scale: A Random Coefficient Analysis with Unbalanced Panel Data,"
Journal of Productivity Analysis,
Springer, vol. 18(1), pages 39-57, July.
- Erik Biørn & Kjersti-Gro Lindquist & Terje Skjerpen, 2000. "Heterogeneity in Returns to Scale: A Random Coefficient Analysis with Unbalanced Panel Data," Discussion Papers 292, Statistics Norway, Research Department.
- Grant, James H., 1993. "The translog approximate function : Substitution among inputs in manufacturing evaluated at sample means," Economics Letters, Elsevier, vol. 41(3), pages 235-240.
- repec:adr:anecst:y:2003:i:69:p:03 is not listed on IDEAS
- Berger, Allen N. & Hanweck, Gerald A. & Humphrey, David B., 1987. "Competitive viability in banking : Scale, scope, and product mix economies," Journal of Monetary Economics, Elsevier, vol. 20(3), pages 501-520, December.
- Allen N. Berger & Gerald A. Hanweck & David B. Humphrey, 1986. "Competitive viability in banking: scale, scope, and product mix economies," Research Papers in Banking and Financial Economics 82, Board of Governors of the Federal Reserve System (U.S.).
- Humphrey, David B & Kim, Moshe & Vale, Bent, 2001. "Realizing the Gains from Electronic Payments: Costs, Pricing, and Payment Choice," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 33(2), pages 216-234, May.
- David B. Humphrey & Moshe Kim & Bent Vale, 1998. "Realizing the gains from electronic payments: costs, pricing, and payment choice," Proceedings 586, Federal Reserve Bank of Chicago.
- Erik Biorn & Kjerti-Gro Lindquist & Terje Skjerpen, 2003. "Random Coefficients in Unbalanced Panels: An Application on Data from Chemical Plants," Annals of Economics and Statistics, GENES, issue 69, pages 55-83.
- Erik Biørn & Kjersti-Gro Lindquist, 1998. "Random Coefficients and Unbalanced Panels: An Application on Data from Norwegian Chemical Plants," Discussion Papers 235, Statistics Norway, Research Department.
- Vesala, Jukka, 2000. "Technological transformation and retail banking competition : Implications and measurement," Scientific Monographs, Bank of Finland, number 20/2000.
- Sherrill Shaffer, 1998. "Functional Forms and Declining Average Costs," Journal of Financial Services Research, Springer;Western Finance Association, vol. 14(2), pages 91-115, October.
- Sherrill Shaffer, 1997. "Functional forms and declining average costs," Working Papers 95-13/R, Federal Reserve Bank of Philadelphia.
- Caves, Douglas W & Christensen, Laurits R & Tretheway, Michael W, 1980. "Flexible Cost Functions for Multiproduct Firms," The Review of Economics and Statistics, MIT Press, vol. 62(3), pages 477-481, August.
- Hancock, Diana, 1985. "The Financial Firm: Production with Monetary and Nonmonetary Goods," Journal of Political Economy, University of Chicago Press, vol. 93(5), pages 859-880, October.
- Kirstin E. Wells, 1996. "Are checks overused?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Fall, pages 2-12. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:cpd:pd2002:b3-2. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sune Karlsson)
If references are entirely missing, you can add them using this form.