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

30 Pages Posted: 3 Sep 2013 Last revised: 9 Jul 2015

See all articles by Zhaozhao He

Zhaozhao He

University of New Hampshire - Department of Accounting & Finance

Date Written: July 8, 2015

Abstract

This paper focuses on a novel phenomenon — mobile banking diffusion — to illuminate unresolved questions: whether rivalry and market structure affect the diffusion of a new technology, and if so, under what conditions. 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 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.

Keywords: Innovation, Market Structure, Mobile Banking, Rivalry Adoption, Technology Diffusion

JEL Classification: D43, G21, O14, O33

Suggested Citation

He, Zhaozhao, Rivalry, Market Structure and Innovation: The Case of Mobile Banking (July 8, 2015). Review of Industrial Organization, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2319109 or http://dx.doi.org/10.2139/ssrn.2319109

Zhaozhao He (Contact Author)

University of New Hampshire - Department of Accounting & Finance ( email )

Durham, NH 03824
United States
603-862-3355 (Phone)

HOME PAGE: http://sites.google.com/site/zhaozhaohe

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