Do Internet Activities Add Value? Evidence from the Traditional Banks

Abstract

Internet, Banks, Value, Technology, Risk-return,

Influence of internet and social media presence on small, local banks’ market power

“…The profitability gains were primarily explained by a significant reduction in overhead expenses. Similarly, Ciciretti et al (2009) report a positive and robust relationship between Internet adoption and bank profitability in Italy. However, a study by Onay and Ozsoz (2013) provides a more nuanced evaluation of Internet services' adoption aftereffects.…”

“…The published studies can be roughly categorized into two groups. The first group of studies analyses the determinants of Internet banking adoption (Bauer & Hein, 2006;Courchane, Nickerson, & Sullivan, 2002;Hernández-Murillo, Llobet, & Fuentes, 2010;Santouridis & Kyritsi, 2014), and the second group of studies addresses the consequences of Internet banking introduction (Hitt & Frei, 2002;Delgado, Hernando, & Nieto, 2007;DeYoung, Lang, & Nolle, 2007;Ciciretti, Hasan, & Zazzara, 2009;Onay & Ozsoz, 2013). However, the existing evidence concerns mainly developed markets.…”

“…First, as we indicated above, it supplements still incomplete knowledge on the consequences of I&SMP for banks and their market power in emerging economies. Second, it documents that the benefits signalled in the literature for banks that embraced early Internet technologies (Ciciretti et al, 2009;Delgado et al, 2007;DeYoung et al, 2007;Onay & Ozsoz, 2013) might be unavailable for banks that adopted Internet banking relatively late, such as, for example, an average SLB in Poland. Third, it also complements the literature on cooperative banks' performance drivers in Poland (Jackowicz & Kozłowski, 2016;Miklaszewska & Kil, 2013;Skała, 2015).…”

Interaction Between Internet Banking and Bank Performance: The Case of Europe

“…Some of the research has done so far by Sullivan (2000), DeYoung (2001), Hasan (2002), Pigni et al (2002), Kagan (2005), Alam et al (2007), Arnaboldi & Claeys (2008), Malhotra & Singh (2006, 2007ve 2009), Ciciretti et al (2009), Weigelt & Sarkar (2012, Gutu (2014).…”

Did Good Corporate Governance Improve Bank Performance during the Financial Crisis?

“…Hence, we assume in our analysis that the strength of corporate governance can be quantified with the Gov-Score index, and moreover, that the strength of governance mechanism incorporated in 2005 is reflected in bank performance during 2005-2008. Considerable empirical evidence suggests that strong corporate governance has positive effects on the firm's financial performance, market valuation, and stock returns (see e.g., Ammann et al 2011;Bebchuk et al 2009;Bhagat and Bolton 2008;Brown andCaylor 2006, 2009;Chhaochharia and Laeven 2009;Cremers and Ferrell 2010;Gompers et al 2003;Johnson et al 2009;Renders et al 2010). Following the prior bank performance literature (e. g., Caprio et al 2007;Chiorazzo et al 2008;Ciciretti et al 2009;de Andres and Vallelado 2008;Outreville 2010;Sierra et al 2006), we employ return on assets (ROA) and Tobin's Q to measure the financial performance and market valuation of banks. We calculate return on assets as the earnings before interest and taxes divided by the book value of total assets.…”