Bricks vs. Clicks: SME Online Banking Behaviour and Relationship Banking

Han, Liang (2008) Bricks vs. Clicks: SME Online Banking Behaviour and Relationship Banking. International Journal of Entrepreneurial Behaviour and Research, 14 (1). pp. 47-60. doi:10.1108/13552550810852820

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Purpose – Little research has been conducted on the effects of information technology on financing entrepreneurial businesses or small and medium sized enterprises (SMEs). The purpose of this paper is to examine the impacts of entrepreneurial online banking and relationship banking on the severity of financial problems perceived by entrepreneurs and their interactive effect. It also investigates how characteristics of individual businesses and entrepreneurial demographics influence SMEs' financial situation. Design/methodology/approach – An ordered logistic model is used on a UK dataset to empirically test the hypotheses derived in this paper. The empirical evidence is drawn from the 2004 UK survey of SME finances, which contains a sample of 2,500 firms. Findings – This paper finds that both entrepreneurial online banking behaviour and relationship banking alleviates the severity of financial problems perceived by entrepreneurs. The relationship affect is less evident for entrepreneurs who most frequently use an online approach to communicate with their banks than for those using traditional methods. Business and entrepreneur characteristics also have a strong impact on the severity of the financial problems suffered by SMEs. Originality/value – This paper provides evidence supporting the favourable impacts of the application of information technology on entrepreneurial finance from the perspective of entrepreneur/business. It also identifies a substitute relationship between entrepreneurial online banking behaviour and relationship banking, a relationship which contradicts existing evidence.

Item Type: Article
Article Type: Article
Uncontrolled Keywords: Small to medium‐sized enterprises, Virtual banking, Banks, United Kingdom
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HG Finance
Divisions: Schools and Research Institutes > School of Business, Computing and Social Sciences
Research Priority Areas: Applied Business & Technology
Depositing User: Ineke Tijsma
Date Deposited: 25 Mar 2015 15:33
Last Modified: 07 Aug 2023 15:27

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