Adoption And Diffusion Of Financial Innovations:the Case Of Bank Cards

Financial innovation has increasingly influenced the financial industry, country economies and even the social life, and thus has become the hotspot probed into by the domestic and overseas financial circles. The initial stimulus is a spur to financial innovation, and new financial instruments are adopted by more financial institutions, as thus it can be described as the diffusion of the financial innovations. That is the whole course of financial innovation. In the perspective of the financial institutions, the thesis selects the case of the bank cards as the research object. Using some econometrics models, the thesis empirically studies the adoption and diffusion of financial innovations, so that the author can make discusses on this fresh research field. The thesis has the following results. Firstly, the bigger the scale of the bank is, the faster the bank adopts the bank cards. Secondly, the diffusion of bank cards is influenced by the external and internal factors, and the S-shaped logistic curve indicates the characteristics of the bank cards' diffusion. Thirdly, the influence of the internal factors mostly embodies two aspects, including network externalities and bandwagon pressure. Fourthly, the two external factors including regulation and market concentration have significant relationship with the speed of bank card's diffusion, and a more competitive market makes for the adoption and diffusion of financial innovations.