Performance implications of internet channels in financial services: A comprehensive perspective

Abstract

Advances in information technology (IT) have forced financial services firms to explore new organizational forms and deliver service innovation. Given the obvious differences in the business model in which the financial services sector provides online services, it is natural to ask whether the emergence of Internet channels leads to superior achievement. Using a sample of twenty-four Taiwanese publicly traded financial services firms from 1997 to 2003, this empirical study attempts to assess the Internet channel’s effect on firm performance by means of applying event study methodology and data envelopment analysis. Results show that the magnitudes of average abnormal returns are uniformly positive and increase the operating efficiency of firms following announcements via Internet channels. This work therefore concludes that Internet channels have positive influences on firm performance.

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Acknowledgements

This research project was sponsored by the Taiwan National Science Council (NSC 100-2410-H-126-006-) and supported in part by the School of Management, Providence University.

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Correspondence to Hung-Jen Tu.

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Responsible Editor: Roger W.H. Bons

Appendix

Appendix

  1. 1.

    “For a nation that’s so good at making tech products, Taiwan has been a Net laggard. One exception, though, is Chinatrust Commercial Bank, the country’s largest nongovernment financial institution. Under the leadership of 35-year-old Jeffrey Koo Jr., Chinatrust has more than doubled its tech spending, to $48 million, since 1997, and has tripled its IT staff, to 340 people. In June, it became the first Taiwanese bank to offer online banking.” (Source: http://www.businessweek.com/stories/2000-09-17/leading-taiwan-to-the-net)

  2. 2.

    “Bank SinoPac, a subsidiary of SinoPac Financial Holdings, introduces the first ever patented financial product in the history of Taiwan- “MMA Bid Money On-line Service.” The service is made available at the inauguration press conference hosted by Mr. McKinney Y. T. Tsai as President and CEO of SinoPac Financial Holdings.” (Source: http://www.sinopac.com/eng/news/release01/enews_970701.asp)

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Tu, HJ. Performance implications of internet channels in financial services: A comprehensive perspective. Electron Markets 22, 243–254 (2012). https://doi.org/10.1007/s12525-012-0108-0

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Keywords

  • Event study
  • Internet channels
  • Data Envelopment Analysis (DEA)
  • Performance implications
  • JEL classification
  • M31—Marketing
  • L81—Retail and Wholesale Trade; e-Commerce