Diffusion of off-balance-sheet financial innovations: Information complementarity and market competition

King Fai Fung; Cheuk Sang Cheng

doi:10.1016/j.pacfin.2003.12.001

Diffusion of off-balance-sheet financial innovations: Information complementarity and market competition

King Fai Fung, Cheuk Sang Cheng

Research output: Journal article publication › Journal article › Academic research › peer-review

12 Citations (Scopus)

Abstract

By studying the Hong Kong banking industry, the objective of this study is to examine the role of information complementarity and market competition in governing the diffusion of off-balance-sheet (OBS) financial innovations. Specifically, two OBS financial innovations are information complementary if the adoption of one lowers the uncertainty of adopting another. In addition, market competition may speed up the diffusion of OBS financial innovations because competitive firms are able to capture the full profit potential from successful innovations. A simultaneous equation model is devised to estimate the impacts of information complementarity, market competition, and a number of other factors on the diffusion of OBS financial innovations. Results of estimation suggest that information complementarity and market competition are the primary driving forces behind the diffusion process.

Original language	English
Pages (from-to)	525-540
Number of pages	16
Journal	Pacific Basin Finance Journal
Volume	12
Issue number	5
DOIs	https://doi.org/10.1016/j.pacfin.2003.12.001
Publication status	Published - 1 Nov 2004

Keywords

Banking
Diffusion
Financial innovation
Off-balance-sheet activities

ASJC Scopus subject areas

Finance
Economics and Econometrics

More information

10.1016/j.pacfin.2003.12.001

Cite this

@article{0d89cd0f9ca14488a3d2a761b5b35586,

title = "Diffusion of off-balance-sheet financial innovations: Information complementarity and market competition",

abstract = "By studying the Hong Kong banking industry, the objective of this study is to examine the role of information complementarity and market competition in governing the diffusion of off-balance-sheet (OBS) financial innovations. Specifically, two OBS financial innovations are information complementary if the adoption of one lowers the uncertainty of adopting another. In addition, market competition may speed up the diffusion of OBS financial innovations because competitive firms are able to capture the full profit potential from successful innovations. A simultaneous equation model is devised to estimate the impacts of information complementarity, market competition, and a number of other factors on the diffusion of OBS financial innovations. Results of estimation suggest that information complementarity and market competition are the primary driving forces behind the diffusion process.",

keywords = "Banking, Diffusion, Financial innovation, Off-balance-sheet activities",

author = "Fung, {King Fai} and Cheng, {Cheuk Sang}",

year = "2004",

month = nov,

day = "1",

doi = "10.1016/j.pacfin.2003.12.001",

language = "English",

volume = "12",

pages = "525--540",

journal = "Pacific Basin Finance Journal",

issn = "0927-538X",

publisher = "Elsevier",

number = "5",

}

TY - JOUR

T1 - Diffusion of off-balance-sheet financial innovations: Information complementarity and market competition

AU - Fung, King Fai

AU - Cheng, Cheuk Sang

PY - 2004/11/1

Y1 - 2004/11/1

N2 - By studying the Hong Kong banking industry, the objective of this study is to examine the role of information complementarity and market competition in governing the diffusion of off-balance-sheet (OBS) financial innovations. Specifically, two OBS financial innovations are information complementary if the adoption of one lowers the uncertainty of adopting another. In addition, market competition may speed up the diffusion of OBS financial innovations because competitive firms are able to capture the full profit potential from successful innovations. A simultaneous equation model is devised to estimate the impacts of information complementarity, market competition, and a number of other factors on the diffusion of OBS financial innovations. Results of estimation suggest that information complementarity and market competition are the primary driving forces behind the diffusion process.

AB - By studying the Hong Kong banking industry, the objective of this study is to examine the role of information complementarity and market competition in governing the diffusion of off-balance-sheet (OBS) financial innovations. Specifically, two OBS financial innovations are information complementary if the adoption of one lowers the uncertainty of adopting another. In addition, market competition may speed up the diffusion of OBS financial innovations because competitive firms are able to capture the full profit potential from successful innovations. A simultaneous equation model is devised to estimate the impacts of information complementarity, market competition, and a number of other factors on the diffusion of OBS financial innovations. Results of estimation suggest that information complementarity and market competition are the primary driving forces behind the diffusion process.

KW - Banking

KW - Diffusion

KW - Financial innovation

KW - Off-balance-sheet activities

UR - http://www.scopus.com/inward/record.url?scp=4644260397&partnerID=8YFLogxK

U2 - 10.1016/j.pacfin.2003.12.001

DO - 10.1016/j.pacfin.2003.12.001

M3 - Journal article

SN - 0927-538X

VL - 12

SP - 525

EP - 540

JO - Pacific Basin Finance Journal

JF - Pacific Basin Finance Journal

IS - 5

ER -

Diffusion of off-balance-sheet financial innovations: Information complementarity and market competition

Abstract

Keywords

ASJC Scopus subject areas

More information

Other files and links

Fingerprint

Cite this