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

Scott, Susan V., Van Reenen, John 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

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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.
Library of Congress subject classification: H Social Sciences > HG Finance
Journal of Economic Literature Classification System: 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
Sets: Departments > Management
Research centres and groups > Centre for Economic Performance (CEP)
Research centres and groups > Centre for Analysis of Risk and Regulation (CARR)
Project and Funder Information:
Project IDFunder NameFunder ID
ES/M010341/1Economic and Social Research Councilhttp://dx.doi.org/10.13039/501100000269
Date Deposited: 24 Mar 2017 17:29
URL: http://eprints.lse.ac.uk/70776/

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