Role of Network Externalities and Innovation Characteristics in Influencing Intentions to Use an Online Bank: Moderating Technological Anxiety

Authors

  • Nancy Gloria Miranda Universitas Indonesia
  • Tengku Ezni Balqiah Universitas Indonesia

DOI:

https://doi.org/10.33736/ijbs.3354.2020

Keywords:

network externalities, innovation characteristics, technological anxiety, intention to use, online bank

Abstract

Digital innovations have numerous impacts on modern life; as such, many business models have integrated online or virtual forms, which includes banking. An online bank is a virtual form of a bank’s business model that utilizes smartphones and the Internet. This paper intends to analyze the role of network externalities, innovation characteristics, and technological anxiety on the intention to use new forms of this financial business model. The model of this research uses three aforementioned theories on intention to use an online bank in Indonesia. This paper further verifies the relationship between network externalities to intention to use and examines whether any mediating effect of innovation and/or technological anxiety have a moderating effect on the proposed relationships. With the participation of 174 respondents, the data were gathered through purposive sampling and then analyzed using structural equation modeling with three types
of relationships: direct, indirect/mediation, and moderation. The result show that network externalities have direct effects on intention to use, most characteristics of innovation have mediating effects on previous relationships, and technological anxiety has a moderating effect in some paths.

References

Agarwal, R., & Prasad, J. (1997). The role of innovation characteristics and perceived voluntariness in the acceptance of information technologies. Decision Sciences, 28(3), 557–582.

Ahmad, J. I. & Daud, M. S. (2011, Dec 5-6). Technophobia phenomenon in higher educational institution: A case study, Humanities, Science and Engineering (CHUSER). Paper presented at the 2011 IEEE Colloquium on Humanities, Science, and Engineering Research, CHUSER 2011 (pp. 111-116), Penang, Malaysia. doi: doi:10.1109/chuser.2011.6163697

Bozbay, Z., & Yasin, B. (2008). The impact of perceived innovation characteristics on technology adoption. The International Journal of Technology, Knowledge, and Society, 4(4), 117–128.

Burn-Callander, R. (2014, February 25). The history of money: From barter to bitcoin. Retrieved from https://www.telegraph.co.uk.

Brynjolfsson, E., & Kemerer, C. F. (1996). Network externalities in micro-computer software: an econometric analysis of the spreadsheet market. Management Science, 42(12), 1627–1648.

Chen, J., Durairaj, S., Vinayak, H. V., & Lam, K. (2014). Digital banking in Asia: Are you ready for your next generation of customers? In Gold, A., Bucci, R., Ferry, N., Foyen, L., Gallagher, C., Hunter, D., & Wang, J (Eds.), Digital Banking in Asia Winning approaches in a new generation of financial services. Australia: McKinsey & Company.

Chou, C., & Shy, O. (1990). Network effects without network externalities. International Journal of Industrial Organization, 8(2), 259–270.

Compeau, D. H., & Huff, S. (1999). Social cognitive theory and individual reactions to computing technology: a longitudinal study. MIS Quarterly, 23(2), 145–158.

Cooper, D., & Schindler, P. (2014). Business research methods. (12th ed.) Singapore: McGraw-Hill.

Cornescu, V., & Adam, C. (2013). The consumer resistance behavior towards innovation. Procedia Economics and Finance, 6, 457–465.

Das, K., Gryseels, M., Sudhir, P., & Tan, K. (2016). Unlocking Indonesia’s digital opportunity. Australia: McKinsey & Company.

Dearing, J. A. (2007). Measurement of innovation attributes. Retrieved from http://crn.hostworks.net/media/3399/innovation_attributes_measurement_2_.pdf

Ewe, S., Yap, S., & Lee, C. (2015). Network externalities and the perception of innovation characteristics: Mobile banking. Marketing Intelligence & Planning, 33(4), 592–611.

Fornell, C., & Larcker, D. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50.

Fugger, R. (2004). Money as IOUs in social trust networks & a proposal for a decentralized currency network protocol. Retrieved from http://www.library. uniteddiversity.coop.

Gu, J., Lee, S., & Suh, Y. (2009). Determinants of behavioral intention to mobile banking. Expert Systems with Applications, 36(9), 11605–11616.

Hair, J. F., Black, W. C., Babin, B., & Anderson, R. E. (2010). Multivariate data analysis. New York: Pearson Prentice Hall.

Igbaria, M., & Iivari, J. (1995). The effects of self-efficacy on computer usage. Omega, International Journal of Management Science, 23(6), 587–605.

Indonesian Internet Service Providers Association. (2017). Penetration of infography and Internet user behavior in Indonesia. Retrieved June 6, 2018, from http://www.teknopreneur.com.

Jarvenpaa, S. L., Tractinsky, N., & Vitale, M. (2000). Consumer trust in an Internet store. Information Technology and Management, 1, 45–71.

Woo, J. (2017, August 30). DBS Launches Digibank in Indonesia. The Straits Times. Retrieved from https://www.straitstimes.com/business/companies-markets/dbs-launches-digibankin-indonesia

Katz, M., & Shapiro, C. (1986). Technology adoption in the presence of network externalities. The Journal of Political Economy, 94(4), 822–841.

Kinda, T., & Yan, T. (2018, February 22). A Digital-Savvy Indonesia. Retrieved from https://blogs.imf.org/2018/02/22/a-digital-savvy-indonesia/

Leibenstein, H. (1950). Bandwagon, snob, and Veblen effects in the theory of consumers’demand. The Quarterly Journal of Economics, 64(2), 183–207.

Liebowitz, S., & Margolis, S. E. (1994). Network externality: An uncommon tragedy. The Journal of Economic Perspectives, 8(2), 133–150.

Limthongchai, P., & Speece, M. (2003). The effect of perceived characteristics of innovation on e-commerce adoption by SMEs in Thailand. SSRN Electronic Journal.

Meuter, M., Ostrom, A., Bitner, M., & Roundtree, R. (2003). The influence of technology anxiety on consumer use and experiences with self-service technologies. Journal of Business Research, 56(11), 899–906.

Moore, G. C., & Benbasat, I. (1991). Development of an instrument to measure the perceptions of adopting an information technology innovation. Information Systems Research, 2(3), 192–221.

Panian, Z. (2001). A brief discussion on demand-side network externalities. Working paper, University of Zagreb, Croatia.

Parthasarathy, M., & Bhattacherjee, A. (1998). Understanding post-adoption behavior in the context of online services. Information Systems Research, 9(4), 362-379.

Rogers, E. (1995). Diffusion of innovations (4th ed). New York: Free Press.

Rohlfs, J. (1974). A theory of independent demand for a communications service, Bell Journal of Economics, Spring, 5, 16–37.

Sengupta, J. (2014). Theory of Innovation: A new paradigm of growth. London: Springer Cham.

Shurmer, M. (1993). An investigation into sources of network externalities in the packaged PC software market. Information Economics and Policy, 5(3), 231–251.

Song, M., Parry, M., & Kawakami, T. (2009). Incorporating network externalities into the technology acceptance model. Journal of Product Innovation Management, 26(3), 291–307

Strader, T., Ramaswami, S., & Houle, P. (2007), Perceived network externalities and communication technology acceptance. European Journal of Information Systems, 16(1), 54–65.

Van Slyke, C., Ilie, V., Lou, H., & Stafford, T. (2007). Perceived critical mass and the adoption of a communication technology. European Journal of Information Systems, 16(3), 270–283.

Venkatesh, V., Morris, M. G., Davis, G. B., & Davis, F. D. (2003). User acceptance of information technology: toward a unified view, MIS Quarterly, 27(3), 425–478.

Wang, C., Lo, S., & Fang, W. (2008). Extending the technology acceptance model to mobile telecommunication innovation: The existence of network externalities. Journal of Consumer Behavior, 7(2), 101–110.

Williams-Grut, O. (2015). This is how a new crop of companies is trying to reinvent banking. [online] Business Insider. Retrieved March 10, 2018, from http://www.uk.businessinsider.com

Wijanto, S. (2008). Structural equation modeling with LISREL 8.8: Concepts and Tutorial. Yogyakarta: Graha Ilmu.

Younes, M. B., & Al-Zoubi, S. (2015). The impact of technologies on society: A review. IOSR Journal of Humanities and Social Science, 20(2), 82–86.

Downloads

Published

2020-12-07

How to Cite

Nancy Gloria Miranda, & Tengku Ezni Balqiah. (2020). Role of Network Externalities and Innovation Characteristics in Influencing Intentions to Use an Online Bank: Moderating Technological Anxiety. International Journal of Business and Society, 21(3), 1352–1365. https://doi.org/10.33736/ijbs.3354.2020