Do Internet Activities Add Value? Evidence from the Traditional Banks
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Very little is known about how adopting Internet activities impact traditional banks. By tracing the experience of Italian commercial banks, we provide evidence and implications for banks’ use of new Internet technology and innovative banking products as they relate to performance. Using different definitions for what is considered as Internet activity and by examining alternative proxies for bank return and risk, we find a significant link between offerings of Internet banking products and bank performance. Although this link is significantly positive for bank returns, we find a negative, marginally significant, association between the adoption of Internet activities and bank risk.
KeywordsInternet Banks Value Technology Risk-return
The authors are grateful to an anonymous referee and the editor Haluk Unal for valuable comments and suggestions. The views expressed in this paper are those of the authors and do not necessarily reflect the views of the associated institutions. Usual caveats apply. Special thanks go to Roberto Moretti, Luca De Marco and Marco Pellegrini. Without their input the authors could not have completed this project. The authors also thank Riccardo DeLisa, Roberto Malavasi, Andrea Resti, and Sandra Sizer for comments and suggestions. Hasan thanks FITD, Italy for support. All errors belong to us. The usual discaimer applies.
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