Analysing the impact of digital technology diffusion on the efficiency and convergence process of the commercial banking industry of Pakistan.
In a dynamic financial ecosystem, digitalisation is supporting banks in revamping their business processes to be more efficient, reducing costs, coping with customers' evolving demands, and keeping them abreast of market competition. This two-stage research aims to investigate three issues in Pakist...
| Published in: | Humanities & Social Sciences Communications Vol. 11; no. 1; pp. 1 - 28 |
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| Main Authors: | , , , |
| Format: | Article |
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Springer Nature
6/20/2024
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=hlh&AN=178028975&site=ehost-live header: @attributes: shortDbName: hlh uiTerm: 178028975 longDbName: Humanities International Complete uiTag: AN controlInfo: bkinfo: jinfo: jid: MVR0 jtl: Humanities & Social Sciences Communications maglogo: N pubinfo: dt: 6/20/2024 vid: 11 iid: 1 pid: 237 pub: Springer Nature artinfo: ui: 178028975 10.1057/s41599-024-03184-1 ppf: 1 ppct: 27 formats: tig: atl: Analysing the impact of digital technology diffusion on the efficiency and convergence process of the commercial banking industry of Pakistan. aug: au: Liu, Ting Li Naveed, Muhammad Mateen Mustafa, Sohaib Naveed, Muhammad Tahir affil: https://ror.org/037b1pp87 College of Economics & Management, Beijing University of Technology, 100124, Beijing, China https://ror.org/011maz450 Hailey College of Commerce, University of the Punjab, F7H8+HFV, Canal Road, Lahore, Punjab, Pakistan su: Technology transfer Banking industry Digital technology Data envelopment analysis Interest rates Current awareness services Pakistan sug: subj: Pakistan Technology transfer Banking industry Digital technology Data envelopment analysis Interest rates Current awareness services ab: In a dynamic financial ecosystem, digitalisation is supporting banks in revamping their business processes to be more efficient, reducing costs, coping with customers' evolving demands, and keeping them abreast of market competition. This two-stage research aims to investigate three issues in Pakistan's banking industry from 2006 to 2020: (i) banking efficiency; (ii) the impact of digitalisation on banking efficiency; and (iii) banking efficiency's absolute and conditional convergence. In our first-stage analysis, bootstrap data envelopment analysis has been applied, which exhibits bias-corrected overall, pure, and scale efficiencies of 74, 77, and 96%, respectively. In the second-stage analysis, we executed Tobit and two-step dynamic panel data system generalised method of moments (DPDSYS-GMM) models, and the results uncover that digitalisation has a positive influence on banking efficiency. Findings confirm that return on assets, bank size, interest rate, and gross domestic product growth rate have a positive association with banking efficiency. Our research reveals that state-controlled banks outperform their private sector and special-purpose counterparts. Our DPDSYS-GMM findings validate β and σ-convergence, implying that initially, low-efficient banks caught up (converged) to the more efficient opponents, reducing cross-sectional efficiency dispersion and attaining common equilibrium. The findings of banking efficiency conditional β-convergence assert that the adoption of digital technology has played a critical role in the convergence process and that digitalisation has acted as a catalyst for less efficient banks to catch up significantly faster to their more efficient rivals. This study displays digitalisation's disruptive influence on the overall transformation of Pakistan's banking system in the modern era, resulting in significant efficiency gains. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: Y dt: @attributes: year: 2024 holdings: @attributes: islocal: N |
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