Network externalities and the perception of innovation characteristics: mobile banking

Purpose – The purpose of this paper is to clarify the relationship between the sub-components of network externalities (NE), investigates the mediating role of the perception of innovation characteristics and explores the potential moderating effects of technology anxiety within an integrative framework using the theories of diffusion of innovation (DOI) and NE on the behavioural intention of mobile banking services. NE theory explains the impact of an increase in number of users and complementary services on perceived value of product innovation. Design/methodology/approach – This study clarifies the relationship between the sub-components of NE, investigates the mediating role of the perception of innovation characteristics and explores the potential moderating effects of technology anxiety within an integrative framework using the theories of DOI and NE on the behavioural intention of mobile banking services. NE theory explains the impact of an increase in number of users and complementary services on perceived value of product innovation. Findings – Empirical results support the positive relationship between perceived number of users and availability of complementary services. The results lend support to the hypothesized mediating role of perceived compatibility and perceived complexity on the influence of indirect NE on the intention to use mobile banking. Finally, technology anxiety did not moderate any of the paths postulated in the hypothesized model. Practical implications – The findings suggest that the willingness to adopt mobile banking may be increased by providing and promoting a wide range of complementary services because the availability of complementary services gives the impression that mobile banking is easy to use and is compatible with their lifestyles. Originality/value – This study contributes to the literature on DOI by using NE theory, a theory borrowed from Economics to explain an underlying motivation to adopt an innovation. This is an original study which tests the proposition that NE may influence the perception of innovation characteristics and intention to adopt an innovation.