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The Determinants of Technology Adoption: The Case of the Banking Firm

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  • Timothy H. Hannan
  • John M. McDowell

Abstract

Using data on the adoption of automatic teller machines by firms in the banking industry, this study examines the relationship between the decision to adopt new technology and its determinants. Since banking firms differ considerably in terms of the competitive environments in which they operate, focusing on this one innovation in this industry allows a stronger test of the relationship between market structure and the adoption of new technology than has been previously conducted. Using a failure time estimation procedure, we find that larger banks and banks operating in more concentrated local banking markets register a higher conditional probability of adopting this new technology, all else equal. We also find that other results are consistent with the underlying model and that the bank's regulatory environment shapes its adoption decision in plausible ways.

Suggested Citation

  • Timothy H. Hannan & John M. McDowell, 1984. "The Determinants of Technology Adoption: The Case of the Banking Firm," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 328-335, Autumn.
    • Handle: RePEc:rje:randje:v:15:y:1984:i:autumn:p:328-335
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