Open AccessThe Impact of Innovation on Banking Performance: Evidence from Lebanese Banking Sector
Author(s) -
Fatima Tarek Chalabi
Publication year - 2020
Language(s) - English
DOI - 10.47260/jafb/1069
Subject(s) - capitalization , business , asset quality , mobile banking , return on assets , equity (law) , return on equity , sample (material) , asset (computer security) , financial system , quality (philosophy) , finance , economics , capital adequacy ratio , stock exchange , marketing , profit (economics) , philosophy , linguistics , chemistry , computer security , chromatography , epistemology , political science , computer science , law , microeconomics
This study examines the impact of innovation on performance of the Lebanese banks during 7 years period from 2009 to 2015. Based on a sample of seventeen Lebanese owned commercial banks, a Weighted Least Squares model was employed to investigate the relationship between two banking innovations, namely mobile banking and investment in computer software and banks’ performance as measured by Return-On-Assets and Return-On-Equity. Four control variables were included in the study specifically bank’s capitalization, cost efficiency, asset quality and bank’s size. The findings of the study showed that the two innovations studied have both significant but opposite impact on banks’ performance.