The Effect of New Technology in Payment Services on Banks' Intermediation

Kjersti-Gro Lindquist ()
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Kjersti-Gro Lindquist: Central Bank of Norway, Postal: Central Bank of Norway, P.O.Box 1179 Sentrum, N-0107 Oslo, Norway

No B3-2, 10th International Conference on Panel Data, Berlin, July 5-6, 2002 from International Conferences on Panel Data

Abstract: In many countries, payment services in banking have shifted from paper-based giro and check payments to electronic giro and debit card payments. This paper analyses the effect of this change in payment technology within a multiple-output framework using Norwegian bank level panel data. The dual approach with four variable inputs is applied, and the general model includes random coefficients to capture heterogeneity in the production technology across banks. The results show that the move towards electronic payment services has (i) decreased average costs, (ii) increased the economies of scale in the production of deposits more than in the production of loans, and (iii) affected input demand asymmetric. The input ratio between labour and both physical capital and materials have decreased.

Keywords: Banking industry; Electronic payments; Technical change; Panel data (search for similar items in EconPapers)
JEL-codes: C33 G21 O33 (search for similar items in EconPapers)
Date: 2002-03
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:cpd:pd2002:b3-2

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