Does Technology Lead to Better Financial Performance? A Study of Indian Commercial Banks

Dhiraj Sharma
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Dhiraj Sharma: School of Management Studies, Punjabi University, India

Managing Global Transitions, 2012, vol. 10, issue 1 (Spring), 3-28

Abstract: It has been a matter of debate whether Technology provides better financial results and improves productivity. The present paper attempts to study the inter-group comparison of financial performance of Indian banks by classifying the banks on the basis of usage of Technology. Further, for the purpose of temporal comparison, the period for the study has been divided into two parts, i. e. low technology induction period and high technology induction period. Findings of the paper show that the fully IT oriented banks are financially better off than the partially IT oriented banks. Moreover, the performance of almost all the banks under study has tremendously improved in the high technology induction period. However, for the Indian banking industry, the correlation between Technology induction and financial productivity is negative though statistically insignificant and low.

Keywords: IT productivity paradox; information technology; financial performance; indian banks; spread and burden ratios (search for similar items in EconPapers)
JEL-codes: G21 M15 O33 (search for similar items in EconPapers)
Date: 2012
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