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The Impact of Technology Adoption on Market Structure

Timothy H. Hannan and John M. McDowell
The Review of Economics and Statistics
Vol. 72, No. 1 (Feb., 1990), pp. 164-168
Published by: The MIT Press
DOI: 10.2307/2109755
Stable URL: http://www.jstor.org/stable/2109755
Page Count: 5
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
The Impact of Technology Adoption on Market Structure
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Abstract

This paper examines the impact of bank adoptions of automated teller machines (ATMS) on subsequent levels of concentration in local banking markets. The findings suggest that banks have had some success in using ATMs to attract customers from competitors. As a consequence, technology adoption's impact on market structure depends upon whether it is the larger or smaller firms within the market that adopt the new technology. Large firm adoptions increase concentration levels, while small firm adoptions tend to reduce them. The evidence also suggests that a state of structural disequilibrium seems to be characteristic of banking markets.

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