The Impact of the Diffusion of a Financial Innovation on Company Performance: An Analysis of SWIFT Adoption

How does a major financial network innovation influence firm performance? Despite much speculation we have little hard quantitative evidence about the impact of technology diffusion in financial services. In this paper we use the entire adoption history for SWIFT (the Society for Worldwide Interbank Financial Telecommunication - standards provider and messaging carrier) matched to bank-level panel data for the US, Canada and 27 European countries. Our dataset covers almost 7,000 banks (including 1,689 SWIFT adopters) between 1998 and 2005. We find that adoption appears to have large effects on profitability, but it takes several years before any positive return is discernible, consistent with the idea of significant complementarities between new technologies and firm organization. The profitability effect operates by both raising sales and decreasing operating costs and is greater for smaller firms than larger firms. Although the long-run effects are similar, US and UK banks appear to reap the benefits from adoption more quickly than their Continental European counterparts. This is consistent with the idea that the impact of information and communication technologies is stronger in the US than Europe due to lower adjustment costs.Diffusion, profitability, banks, SWIFT

Diffusion and use of financial telecommunication: An empirical analysis of SWIFT adoption

The purpose of the current work is to investigate how country-level and regionspecific characteristics influence the adoption of a major financial telecommunication innovation and standard (SWIFT) in the banking sector. Using annual data on the diffusion and usage intensity of SWIFT between more than 100 countries, this study finds that, along other characteristics, economies with higher GPDs and closer to the innovation source have on average a faster adoption rate than smaller, distant economies, all else equal. The analysis also shows that even though financial institutions differ considerably, network effects persist and dominate firm heterogeneity. The results are overall consistent with other findings using similar estimation techniques, and provide a stronger test by focusing on one specific innovation in the financial services industry rather then aggregate IT measures

Diffusion and use of financial telecommunication: An empirical analysis of SWIFT adoption

The purpose of the current work is to investigate how country-level and regionspecific characteristics influence the adoption of a major financial telecommunication innovation and standard (SWIFT) in the banking sector. Using annual data on the diffusion and usage intensity of SWIFT between more than 100 countries, this study finds that, along other characteristics, economies with higher GPDs and closer to the innovation source have on average a faster adoption rate than smaller, distant economies, all else equal. The analysis also shows that even though financial institutions differ considerably, network effects persist and dominate firm heterogeneity. The results are overall consistent with other findings using similar estimation techniques, and provide a stronger test by focusing on one specific innovation in the financial services industry rather then aggregate IT measures

Leadership of healthcare commissioning networks in England : a mixed-methods study on clinical commissioning groups

Objective: To explore the relational challenges for general practitioner (GP) leaders setting up new network-centric commissioning organisations in the recent health policy reform in England, we use innovation network theory to identify key network leadership practices that facilitate healthcare innovation. Design: Mixed-method, multisite and case study research. Setting: Six clinical commissioning groups and local clusters in the East of England area, covering in total 208 GPs and 1 662 000 population. Methods: Semistructured interviews with 56 lead GPs, practice managers and staff from the local health authorities (primary care trusts, PCT) as well as various healthcare professionals; 21 observations of clinical commissioning group (CCG) board and executive meetings; electronic survey of 58 CCG board members (these included GPs, practice managers, PCT employees, nurses and patient representatives) and subsequent social network analysis. Main outcome measures: Collaborative relationships between CCG board members and stakeholders from their healthcare network; clarifying the role of GPs as network leaders; strengths and areas for development of CCGs. Results: Drawing upon innovation network theory provides unique insights of the CCG leaders’ activities in establishing best practices and introducing new clinical pathways. In this context we identified three network leadership roles: managing knowledge flows, managing network coherence and managing network stability. Knowledge sharing and effective collaboration among GPs enable network stability and the alignment of CCG objectives with those of the wider health system (network coherence). Even though activities varied between commissioning groups, collaborative initiatives were common. However, there was significant variation among CCGs around the level of engagement with providers, patients and local authorities. Locality (sub) groups played an important role because they linked commissioning decisions with patient needs and brought the leaders closer to frontline stakeholders. Conclusions: With the new commissioning arrangements, the leaders should seek to move away from dyadic and transactional relationships to a network structure, thereby emphasising on the emerging relational focus of their roles. Managing knowledge mobility, healthcare network coherence and network stability are the three clinical leadership processes that CCG leaders need to consider in coordinating their network and facilitating the development of good clinical commissioning decisions, best practices and innovative services. To successfully manage these processes, CCG leaders need to leverage the relational capabilities of their network as well as their clinical expertise to establish appropriate collaborations that may improve the healthcare services in England. Lack of local GP engagement adds uncertainty to the system and increases the risk of commissioning decisions being irrelevant and inefficient from patient and provider perspectives

The Covid-19 impact on fintech: now is the time to boost investment

Fintechs may be uniquely positioned to facilitate credit to businesses and monetary aid to individuals, write Markos Zachariadis, Pinar Ozcan, and Dize Dinçko

COUNTING ON GUANXI WHEN TRANSACTING MILLIONS? HYBRID GUANXI AND THE BEAUTY OF BRICOLAGE

This paper presents a new type of guanxi: hybrid guanxi. We study the informal market in China’s Commercial Paper market, where there is no official infrastructure for online paper transactions. We conducted 33 interviews, a two-month observation, and collected a set of screenshots, to understand how informal financiers trade papers online. We discovered that these actors perform network and technology bricolage, which cultivate and maintain hybrid guanxi through computer-mediated technologies, offline interactions, and transitive ties. Our work enriches the literature of guanxi. Unlike a large body of literature, our work does not assume two prerequisites for online transactions: 1) the existence of transactional infrastructure is prior to the occurrence of transactions, 2) such infrastructure safeguards economic exchanges. Thus, hybrid guanxi offers a lens to understand how social relations purely support economic transactions in the digital era, which is prevalent in both developing and underdeveloped countries

The long-term effect of digital innovation on bank performance: An empirical study of SWIFT adoption in financial services

We examine the impact on bank performance of the adoption of SWIFT, a network-based technological infrastructure for worldwide interbank telecommunication. We construct a new longitudinal dataset of 6,848 banks in 29 countries in Europe and the Americas with the full history of adoption since SWIFT’s initial operations in 1977. Our results suggest that the adoption of SWIFT (i) has large effects on profitability in the long-term; (ii) is greater for small than for large banks; and (iii) exhibits significant network effects on performance. We use an in-depth field study to better understand the mechanisms underlying the effects on profitability

When guanxi meets structural holes : exploring the guanxi networks of Chinese entrepreneurs on digital platforms

In this exploratory study, we investigate how Chinese entrepreneurs on digital platforms interact and leverage guanxi (a system of relationships and social network) to buffer the negative impacts of structural holes on knowledge orchestration. We develop our research model and formulate ten hypotheses by drawing on the literature. We adopt a mixed-methods research approach in which we use quantitative surveys to test the hypotheses, and qualitative interviews to explain why certain relationships are stronger in one stage of entrepreneurial development than the other. The study contributes to the literature on digital entrepreneurship in two ways. First, this study offers an initial understanding of the dynamics of guanxi networks for knowledge mobilisation and knowledge coordination across start-up and growth stages of Chinese entrepreneurs on digital platforms. Second, by drawing on the relevant literature, our findings extend the current understanding of knowledge orchestration of digital entrepreneurs and contribute to the literatures of structural holes theory and guanxi