Diffusion and use of financial telecommunication: An empirical analysis of SWIFT adoption

The purpose of the current work is to investigate how country-level and region-specific characteristics influence the adoption of a major financial telecommunication innovation and standard (SWIFT) in the banking sector. Using annual data on the diffusion and usage intensity of SWIFT between more than 100 countries, this study finds that, among other characteristics, economies with higher GPDs and closer to the innovation source have on average a faster adoption rate than smaller, distant economies, all else equal. The analysis also shows that even though financial institutions differ considerably, network effects persist and dominate firm heterogeneity. The results are overall consistent with other findings using similar estimation techniques, and provide a stronger test by focusing on one specific innovation in the financial services industry rather than aggregate IT measures.