Financial innovation, firm performance and the speeds of adjustment: New evidence from Kenya’s banking sector
This article examines the speed of adjustment of firm performance to financial innovations usage and the speed of adjustment of financial innovation to financial innovation drivers for banks in Kenya. We used the Koyck distributed lag model, which is estimated using dynamic panel estimation with Sys...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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AOSIS
2018-06-01
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| Series: | Journal of Economic and Financial Sciences |
| Subjects: | |
| Online Access: | https://jefjournal.org.za/index.php/jef/article/view/158 |
| _version_ | 1818336966780911616 |
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| author | Moses M. Muthinja Chimwemwe Chipeta |
| author_facet | Moses M. Muthinja Chimwemwe Chipeta |
| author_sort | Moses M. Muthinja |
| collection | DOAJ |
| description | This article examines the speed of adjustment of firm performance to financial innovations usage and the speed of adjustment of financial innovation to financial innovation drivers for banks in Kenya. We used the Koyck distributed lag model, which is estimated using dynamic panel estimation with System Generalised Method of Moments. We find that it takes on average 1.179 years for bank financial performance to adjust to the four financial innovations studied. Secondly, it takes less than a year (0.368 years) to accomplish 50% of the total change in firm performance following a unit-sustained change in the financial innovations. Moreover, mobile banking has the shortest mean lag (2.849), while Automated Teller Machines (ATMs) have the longest mean lag (4.926). Notably, it takes approximately three years for mobile banking to adjust to financial innovation drivers at firm level and on average five years for ATMs to adjust to the financial innovation drivers. |
| first_indexed | 2024-12-13T14:47:43Z |
| format | Article |
| id | doaj.art-21c5fa213f0246ecbc52fbce981c89f1 |
| institution | Directory Open Access Journal |
| issn | 1995-7076 2312-2803 |
| language | English |
| last_indexed | 2024-12-13T14:47:43Z |
| publishDate | 2018-06-01 |
| publisher | AOSIS |
| record_format | Article |
| series | Journal of Economic and Financial Sciences |
| spelling | doaj.art-21c5fa213f0246ecbc52fbce981c89f12022-12-21T23:41:25ZengAOSISJournal of Economic and Financial Sciences1995-70762312-28032018-06-01111e1e1110.4102/jef.v11i1.158226Financial innovation, firm performance and the speeds of adjustment: New evidence from Kenya’s banking sectorMoses M. Muthinja0Chimwemwe Chipeta1Department of Finance, Risk Management and Banking, University of South Africa, South Africa; Department of Business, St. Paul’s UniversitySchool of Economic and Business Sciences, University of the WitwatersrandThis article examines the speed of adjustment of firm performance to financial innovations usage and the speed of adjustment of financial innovation to financial innovation drivers for banks in Kenya. We used the Koyck distributed lag model, which is estimated using dynamic panel estimation with System Generalised Method of Moments. We find that it takes on average 1.179 years for bank financial performance to adjust to the four financial innovations studied. Secondly, it takes less than a year (0.368 years) to accomplish 50% of the total change in firm performance following a unit-sustained change in the financial innovations. Moreover, mobile banking has the shortest mean lag (2.849), while Automated Teller Machines (ATMs) have the longest mean lag (4.926). Notably, it takes approximately three years for mobile banking to adjust to financial innovation drivers at firm level and on average five years for ATMs to adjust to the financial innovation drivers.https://jefjournal.org.za/index.php/jef/article/view/158financial innovationfinancial performancespeed of adjustment |
| spellingShingle | Moses M. Muthinja Chimwemwe Chipeta Financial innovation, firm performance and the speeds of adjustment: New evidence from Kenya’s banking sector Journal of Economic and Financial Sciences financial innovation financial performance speed of adjustment |
| title | Financial innovation, firm performance and the speeds of adjustment: New evidence from Kenya’s banking sector |
| title_full | Financial innovation, firm performance and the speeds of adjustment: New evidence from Kenya’s banking sector |
| title_fullStr | Financial innovation, firm performance and the speeds of adjustment: New evidence from Kenya’s banking sector |
| title_full_unstemmed | Financial innovation, firm performance and the speeds of adjustment: New evidence from Kenya’s banking sector |
| title_short | Financial innovation, firm performance and the speeds of adjustment: New evidence from Kenya’s banking sector |
| title_sort | financial innovation firm performance and the speeds of adjustment new evidence from kenya s banking sector |
| topic | financial innovation financial performance speed of adjustment |
| url | https://jefjournal.org.za/index.php/jef/article/view/158 |
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