Journal of Economics and Finance

, Volume 21, Issue 3, pp 41–47 | Cite as

The impact of technological change on bank performance

  • Allen L. Webster


Quarterly call report data for 225 banks over twenty-six quarters are used to estimate a quadratic cost function to provide a measure of technological change within the banking industry. The nature of the relationship between technological change and bank performance is then examined. A logit model is formulated to estimate the likelihood that banks will display a positive level of technological development.

Return on assets and return on equity are selected as measures of banking performance. The results suggest that technological change is significantly related to over-all banking performance. Finally, a significant relationship is indicated between bank size and profitability and the rate at which banks implement technological change.


Cost Function Technological Change Total Asset Banking Industry Technological Advancement 


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Copyright information

© Springer 1997

Authors and Affiliations

  • Allen L. Webster
    • 1
  1. 1.Department of Finance and Quantitative MethodsBradley UniversityPeornia

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