The long-term effect of digital innovation on bank performance: an empirical study of SWIFT adoption in financial services

Scott, Susan V. ORCID: 0000-0002-8775-9364, Van Reenen, John ORCID: 0000-0001-9153-2907 and Zachariadis, Markos (2017) The long-term effect of digital innovation on bank performance: an empirical study of SWIFT adoption in financial services. Research Policy, 46 (5). pp. 984-1004. ISSN 0048-7333

Preview

Text - Accepted Version Download (44kB) | Preview

• Author

Abstract

We examine the impact on bank performance of the adoption of SWIFT, a network-based technological infrastructure for worldwide interbank telecommunication. We construct a new longitudinal dataset of 6,848 banks in 29 countries in Europe and the Americas with the full history of adoption since SWIFT’s initial operations in 1977. Our results suggest that the adoption of SWIFT (i) has large effects on profitability in the long-term; (ii) is greater for small than for large banks; and (iii) exhibits significant network effects on performance. We use an in-depth field study to better understand the mechanisms underlying the effects on profitability.

Item Type:	Article
Official URL:	https://www.journals.elsevier.com/research-policy/
Additional Information:	© 2017 Elsevier B.V.
Divisions:	Management Centre for Economic Performance Centre for Analysis of Risk & Regulation
Subjects:	H Social Sciences > HG Finance
JEL classification:	N - Economic History > N2 - Financial Markets and Institutions > N20 - General, International, or Comparative O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development > O33 - Technological Change: Choices and Consequences; Diffusion Processes
Date Deposited:	24 Mar 2017 17:29
Last Modified:	13 Nov 2024 00:09
Projects:	ES/M010341/1
Funders:	Economic and Social Research Council
URI:	http://eprints.lse.ac.uk/id/eprint/70776

Actions (login required)

View Item