The Network Externality And Technological Innovation Diffusion In Banking

Like other industries, the development of banking is not independent of the technological innovations and the diffusion of innovations. Innovations play an important role in banking today. It's very important for banking whether innovations diffuse effectively. Technological innovation diffusion is ignored by researchers all along. Most researches analyze the factors that affect the diffusion of innovation in banking. These researches base on Roger's innovation theory which focuses on the characters of innovations. In fact, the studies of the technological innovation diffusion should have helped the deeper digging in banking technological innovations diffusion, but there are not more works done so far. The existence of network externality in banking is the important aspect for adoptions of innovations in financial markets. The network externality affects adoption-decision of not only banking customers but also banks. The enlargement of the adoption network size means more profit for banks which show economics of scale. So it is very significant in both theory and reality that the study for how the network externality affects the technological innovations diffusion.This paper bases on the innovation diffusion theory and the network externality, which study the classification and specialties of banking innovation, the existence of banking network externality and the impact on the diffusion of banking innovation which raises for the network externality. The banking innovation diffusion hazard model is constructed, introducing survival analysis. The model is adjusted considering the network externality, and is applied the diffusion of ATM in China. The main contents are as follows:(1) Research on the fundamental theories which are the basis of the models constructed. The section gives the definition and the characters of banking technological innovation, and the factors which affect the diffusion of banking innovations. The section also gives the source and classify of banking network externality. According to the ways in which the network externality affects the diffusion of banking innovations and classifies of banking innovation, the situation that the network externality affects the diffusion of banking innovation is given concretely.(2) Research on the banking technological innovations diffusion hazard model. Compared with kinds of innovations diffusion model, survival analysis is chosen to help to construct model because it's more fit here. The hazard model is constructed, which the factors...