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Strategic online-banking adoption

  • Roberto Fuentes
  • Rubén Hernández-Murillo
  • Gerard Llobet

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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File URL: http://research.stlouisfed.org/wp/2006/2006-058.pdf
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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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