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Rivalry, Market Structure and Innovation: The Case of Mobile Banking

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  • Zhaozhao He

Abstract

This paper focuses on a novel phenomenon—mobile banking diffusion—to illuminate unresolved questions: whether and how rivalry adoption and market structure affect the diffusion of a new technology. Using a unique, hand-collected dataset from the iTunes Store for 2008–2012, this study provides evidence that the adoptions of mobile banking apps by local rivals spur future adoptions. This effect is particularly strong in concentrated markets, where banks compete on non-price attributes. These results are robust to the application of instrumental variables that address the possibility that adoptions are merely simultaneous reactions to the same common forces. Copyright Springer Science+Business Media New York 2015

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  • Zhaozhao He, 2015. "Rivalry, Market Structure and Innovation: The Case of Mobile Banking," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 47(2), pages 219-242, September.
    • Handle: RePEc:kap:revind:v:47:y:2015:i:2:p:219-242
    DOI: 10.1007/s11151-015-9466-z
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    References listed on IDEAS

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    Cited by:

    1. Chang-Yang Lee & Ji-Hwan Lee & Ajai S. Gaur, 2017. "Are large business groups conducive to industry innovation? The moderating role of technological appropriability," Asia Pacific Journal of Management, Springer, vol. 34(2), pages 313-337, June.
    2. Spierdijk, Laura & Shaffer, Sherrill & Considine, Tim, 2017. "How do banks adjust to changing input prices? A dynamic analysis of U.S. commercial banks before and after the crisis," Journal of Banking & Finance, Elsevier, vol. 85(C), pages 1-14.
    3. Dai Thich Phan, 2020. "I have seen the future, and it rings - What we know about mobile banking research," Theory Methodology Practice (TMP), Faculty of Economics, University of Miskolc, vol. 16(02), pages 69-79.
    4. John Sedunov, 2017. "Does Bank Technology Affect Small Business Lending Decisions?," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 40(1), pages 5-32, March.

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    More about this item

    Keywords

    Innovation; Market structure; Mobile banking; Rivalry adoption; Technology diffusion; D43; G21; O14; O33;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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