The long-term effect of digital innovation on bank performance: An empirical study of SWIFT adoption in financial services
Name
van-Reenen_The long-term.pdf
Description
Accepted version
Size
1.29 MB
Format
Adobe PDF
Checksum (MD5)
f2ac5894ac8921ae73604e1dcf5e6e04
Author(s)
Scott, Susan V.
Van Reenen, John Michael
Zachariadis, Markos
Date Issued
June 2017
Journal
Research Policy
Publisher
Elsevier BV
Citation
Scott, Susan V. et al. Research Policy "The long-term effect of digital innovation on bank performance: An empirical study of SWIFT adoption in financial services." 46, 5 (June 2017): 984-1004 © 2017 Elsevier B.V.
Version
Author's final manuscript
Abstract
We examine the impact on bank performance of the adoption of SWIFT, a network-based technological infrastructure and set of standards for worldwide interbank telecommunication. We construct a new longitudinal dataset of 6848 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) these profitability effects are 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.
MIT Department
Sloan School of Management
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Creative Commons Attribution-NonCommercial-NoDerivs License
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DOI of Published Version
https://doi.org/10.1016/j.respol.2017.03.010
