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Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/14261

Authors: Kauffman, Robert J.
Wang, Yu-Ming
Issue Date: 31-Aug-1993
Publisher: Stern School of Business, New York University
Series/Report no.: IS-93-25
Abstract: What are the determinants of early interorganizational system (IOS) adoption? This paper focuses on a specific kind of IOS -- shared electronic banking networks -- and employs an economic approach that views adoption and diffusion in terms of cost and benefit. We attempt to identify firm characteristics that are likely to influence the perceived business value of network membership and develop specific hypotheses that can be tested empirically using historical data in a realistic setting. We undertake an exploratory econometric analysis of the adoption of Yankee 24, a large shared electronic banking network in the northeastern United States. Using Bass' analytical diffusion model, we categorize Yankee 24 network members into earlier and later adopters. Probit models are estimated to assess the impact of explanatory variables on shared electronic banking network adoption. The number of branch offices operated by a bank, its total demand deposits, and the proportion of its total deposits accounted for by demand deposits are found to be important predictors of earlier adoption. We find that the number of branch offices operated by a bank, a proxy for the size of its proprietary network, has a negative impact on early adoption, which contradicts the common wisdom that a large firm size is a prerequisite for adoption of technological innovations.
URI: http://hdl.handle.net/2451/14261
Appears in Collections:IOMS: Information Systems Working Papers

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