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. CEP Discussion Papers (CEPDP0992). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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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:	Monograph (Discussion Paper)
Official URL:	http://www.spatialeconomics.ac.uk/
Additional Information:	© 2017 The Authors
Divisions:	Management Centre for Economic Performance Centre for Analysis of Risk & Regulation
Subjects:	H Social Sciences > HG Finance
Date Deposited:	24 Jul 2017 09:15
Last Modified:	01 Dec 2024 21:12
Funders:	Economic and Social Research Council
URI:	http://eprints.lse.ac.uk/id/eprint/83641

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