Does IT investment improve bank performance? Evidence from Europe

Beccalli, Elena

doi:10.1016/j.jbankfin.2006.10.022

Cited by 218 publications

(212 citation statements)

References 31 publications

(47 reference statements)

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“…(1) Bharadwaj, 2000, Dehning & Stratopoulos, 2002, Hitt & Brynjolfsson, 1996, Kim et al, 2009, Peslak, 2003, Rai et al, 1997, Santhanam & Hartono, 2003, Stratopoulos & Dehning, 2000, Tam, 1998(2) Hayes et al, 2001, Mahmood & Mann, 2005, Peslak, 2003, Stratopoulos & Dehning, 2000(3) Alpar & Kim, 1990, Beccalli, 2007, Peslak, 2003, Rai et al, 1997, Shin, 2006, Stratopoulos & Dehning, 2000, Tam, 1998 Contextual factors Contextual factors can be divided into firm, industry and economic factors. Barua et al, 1996, Bharadwaj, 2000, Davern & Kauffman, 2000, Dehning & Richardson, 2002, Ko & Osei-Bryson, 2004, Melville et al, 2004, Zhu et al, 2004 Alignment of IS with a firm's core competencies and business planning and close ties between IS investments and upper management are crucial for enhanced firm performance.…”

Section: Dos Santosmentioning

confidence: 99%

“…While only very few studies analyse cost ratios (Bharadwaj, 2000;Santhanam & Hartono, 2003) or turnover ratios (Barua et al, 1995;Dehning & Stratopoulos, 2002), many studies address profit ratios: IS investments seem to positively affect 'Return on Sales' (Tam, 1998;Bharadwaj, 2000;Dehning & Stratopoulos, 2002;Santhanam & Hartono, 2003;Zhang, 2005;Kim et al, 2009) and 'operating income to employees' (Bharadwaj, 2000;Santhanam & Hartono, 2003), while the positive impact on 'Return on Assets' (Hitt & Brynjolfsson, 1996;Rai et al, 1997;Tam, 1998;Bharadwaj, 2000;Stratopoulos & Dehning, 2000;Dehning & Stratopoulos, 2002;Peslak, 2003;Santhanam & Hartono, 2003;Kim et al, 2009), 'Return on Investment' (Stratopoulos & Dehning, 2000;Hayes et al, 2001;Peslak, 2003;Mahmood & Mann, 2005) and Return on Equity (ROE) (Alpar & Kim, 1990;Rai et al, 1997;Tam, 1998;Stratopoulos & Dehning, 2000;Peslak, 2003;Shin, 2006;Beccalli, 2007;Dehning et al, 2008) is less clear, and seems to depend largely on lag effects, contextual factors and the level of IS investments compared to total assets.…”

Section: Impact On Accounting Performancementioning

confidence: 99%

“…In addition, most studies refer to old data (1980s and 1990s). Some studies are even more specialised, and analyse the impact of hardware expenditures or expenditures based on investments in software (Rai et al, 1997;Beccalli, 2007), production-oriented software (Barua et al, 1995) and Thouin et al (2008).…”

Section: Neglected Disaggregation Of Is Investmentsmentioning

confidence: 99%

“…This view limits the applicability of the synthesised IS business value model and the derived research agenda in several regards: (i) They are not tailored to specific sectors. Such work is provided for the manufacturing sector (Banker et al, 2006), the banking sector (Beccalli, 2007;Casolaro & Gobbi, 2007; Senadheera et al, Interdependencies between particular IS capabilities, competencies and practices; development of IS capabilities over time (change in IS capabilities). Impact of socio-organisational change on changes in IS capabilities; consideration of three types of socio-organisational capabilities: customer management capability, process management capability and performance management capability.…”

Section: Potential For Further Researchmentioning

confidence: 99%

“…While only a few, mostly early studies (Dos Santos et al, 1993;West & Courtney, 1993;Hitt & Brynjolfsson, 1996;Rai et al, 1997;Im et al, 2001) doubt the economic power of IS, the vast majority of research papers on IS business value (e.g. (Dedrick et al, 2003;Dehning et al, 2003Dehning et al, , 2008Peslak, 2003;Santhanam & Hartono, 2003;Swierczek & Shrestha, 2003;Mahmood & Mann, 2005;Zhang, 2005;Shin, 2006;Lin & Shao, 2006a;Aral et al, 2007;Beccalli, 2007;Neirotti & Paolucci, 2007;Wan et al, 2007;Kohli & Grover, 2008;Kim et al, 2009;Ramirez et al, 2010;Han et al, 2011;Kim & Mithas, 2011;Lee et al, 2011)) find empirical evidence and theoretical arguments in favour of both the operational and strategic relevance of IS. The prominent, but non-academic Harvard Business article by Carr (2003), entitled 'IT doesn't matter', has also been refuted (Schrage, 2003;European Journal of Information Systems (2013) 22, 139-169 DeJarnett et al, 2004).…”

Section: Introductionmentioning

confidence: 99%

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Revisiting IS business value research: what we already know, what we still need to know, and how we can get there

Schryen

2013

European Journal of Information Systems

317

354

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The business value of investments in Information Systems (IS) has been, and is predicted to remain, one of the major research topics for IS researchers. While the vast majority of research papers on IS business value find empirical evidence in favour of both the operational and strategic relevance of IS, the fundamental question of the causal relationship between IS investments and business value remains partly unexplained. Three research tasks are essential requisites on the path towards addressing this epistemological question: the synthesis of existing knowledge, the identification of a lack of knowledge and the proposition of paths for closing the knowledge gaps. This paper considers each of these tasks. Research findings include that correlations between IS investments and productivity vary widely among companies and that the mismeasurement of IS investment impact may be rooted in delayed effects. Key limitations of current research are based on the ambiguity and fuzziness of IS business value, the neglected disaggregation of IS investments, and the unexplained process of creating internal and competitive value. Addressing the limitations we suggest research paths, such as the identification of synergy opportunities of IS assets, and the explanation of relationships between IS innovation and change in IS capabilities.

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Section: Dos Santosmentioning

confidence: 99%

Section: Impact On Accounting Performancementioning

confidence: 99%

Section: Neglected Disaggregation Of Is Investmentsmentioning

confidence: 99%

Section: Potential For Further Researchmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Revisiting IS business value research: what we already know, what we still need to know, and how we can get there

Schryen

2013

European Journal of Information Systems

317

354

View full text Add to dashboard Cite

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Sustainability in The Banking Industry: A Strategic Multi‐Criterion Analysis

2017

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The current paper aims to develop an effective and integrated MCDM model for the evaluation of the sustainability practices in the banking services, employing a multi‐stage, fuzzy MCDM model that integrates the Balanced Scorecard, fuzzy AHP and fuzzy TOPSIS. The approach aims to evaluate sustainability from the following four perspectives: financial stability, customer relationship management, internal business process and environment‐friendly management system. A real implementation dealing with the six largest commercial banks in India is discussed. The results highlights the critical aspects of the evaluation criteria and the issues in improving sustainable banking performances. Regarding the sustainability issues, it is shown that the environment‐friendly management system takes a back seat compared with the other criteria. Furthermore, the results show that there is a misunderstanding of the role that corporate social responsibility plays with respect to environmental issues. The developed evaluation model offers a valuable management tool for banks' administrators by assisting them in strategic choices in order to achieve their objective of sustainability and sustainable banking. Moreover, it offers a measuring tool with unique features that complements the emerging trend of integrated reporting considering uncertainty. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

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The productivity paradox of information technology: The Ghanaian bank–level evidence

Boadi

Mawutor

Dzorka

et al. 2022

E J Info Sys Dev Countries

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This study attempts to investigate the impact of information technology (IT) investments on efficiency among banks in Ghana. The study further tests the presence of the productivity paradox in the Ghanaian banking sector. This study employs a random effect model (REM) using 23 banks in Ghana from 2000 to 2019, thus yielding 460 observations. The study revealed that there is a significant and negative relationship between IT investments and cost to income ratio used as a surrogate for banks' efficiency. This result, therefore, suggests that investment in IT translates into banks' efficiency. The study further revealed that varied results are produced when the same relationship is tested in terms of banks' ownership structures, different minimum capital requirement regimes and listing status of banks in Ghana. The findings also suggest that while investment in technology by locallyowned banks enhances efficiency, the introduction and changes of minimum capital requirements do not translate into banks' efficiency. The results have implications for the management of banks, governments and regulators. It shows the need for policy and investments that improve state-of-the-art technology.banks, cost to income ratio, efficiency, random effect model | INTRODUCTIONProductivity paradox of technology developed and popularized by Solow (1987) posits that as more investment is made in technology, performance may go down instead of up. The productivity paradox of technology is becoming increasingly prevalent in the service sector (Brynjolfsson, 1993). Notwithstanding, the empirical evidence on the banking industry is limited.Recent studies document that there has been considerable advancement in the banking industry globally over the years (Kayisire & Wei, 2016;Pathak et al., 2019). Kayisire and Wei (2016) concluded that most developing countries, particularly the African nations, have shown a significant improvement in technology adoption and usage during the last two decades. Abor (2005) asserts that apart from staff costs and other operational costs, technology is usually an item in the budget with the highest cost of most banks, and the fastest-growing item as well. A major change noticed in the Ghanaian banking system was the introduction of information technology (IT) in their operations. In the past, governments have attempted several digitization projects and policies. A sustainability-driven move embarked by the present government on a call for paperless transactions in the country has been embraced by a lot of businesses. Banks have also responded positively to this call by pursuing vigorously the integration of IT in modern banking services. Key among these initiatives are as follows:First, paper works have been reduced with the introduction of branch digitization projects that seek to automate branch banking. Second, to reduce the human traffic in the banking halls, staffs have been trained to educate and encourage customers to use the bank's plethora

show abstract

Does IT investment improve bank performance? Evidence from Europe

Cited by 218 publications

References 31 publications

Revisiting IS business value research: what we already know, what we still need to know, and how we can get there

Revisiting IS business value research: what we already know, what we still need to know, and how we can get there

Sustainability in The Banking Industry: A Strategic Multi‐Criterion Analysis

The productivity paradox of information technology: The Ghanaian bank–level evidence

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