Resolving Productivity Paradox of Fully and Partially IT Oriented Banks: Evidence from India
Technology has become the buzzword in the Indian banking sector these days. It has been, now more than 15 years since the Indian banking sector is liberalized, privatized and globalized. All the bank groups in India are rapidly embracing Information Technology (IT). However, it is a matter of debate whether Technology provides better financial results. There is no conclusive evidence that IT improves financial performance. It is generally believed that the technology provides efficiency, hence improves working and performance of an organization (Productivity Paradox). This implies that with the technology induction, the financial performance of an organization should also improve. Findings of the paper show that the fully IT oriented Indian banks are financially better off than the partially IT oriented Indian banks. This implies that technology does provide an edge which leads to better financial performance.
KeywordsInformation technology financial performance Indian commercial banks profitability analysis
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