Diffusion and Use of Financial Telecommunication: An Empirical Analysis of SWIFT Adoption

44 Pages Posted: 24 Nov 2011 Last revised: 30 Sep 2012

See all articles by Markos Zachariadis

Markos Zachariadis

Alliance Manchester Business School, University of Manchester

Date Written: October 1, 2011

Abstract

The purpose of the current work is to investigate how country-level and region-specific characteristics influence the adoption of a major financial telecommunication innovation and standard (SWIFT) in the banking sector. Using annual data on the diffusion and usage intensity of SWIFT between more than 100 countries, this study finds that, along other characteristics, economies with higher GPDs and closer to the innovation source have on average a faster adoption rate than smaller, distant economies, all else equal. The analysis also shows that even though financial institutions differ considerably, network effects persist and dominate firm heterogeneity. The results are overall consistent with other findings using similar estimation techniques, and provide a stronger test by focusing on one specific innovation in the financial services industry rather then aggregate IT measures.

Keywords: Financial telecommunication, diffusion, network effects, ICT adoption, usage intensity, SWIFT

JEL Classification: O33, N20, L1

Suggested Citation

Zachariadis, Markos, Diffusion and Use of Financial Telecommunication: An Empirical Analysis of SWIFT Adoption (October 1, 2011). NET Institute Working Paper No. 11-10, Available at SSRN: https://ssrn.com/abstract=1952843 or http://dx.doi.org/10.2139/ssrn.1952843

Markos Zachariadis (Contact Author)

Alliance Manchester Business School, University of Manchester ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom
M15 6PB (Fax)

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