Facebook Adoption in Indian Banks: An Empirical Investigation

Abstract

In this article, we try to identify the determinants of adoption of social media, in particular Facebook, among the Indian scheduled commercial banks. We have employed the survival analysis technique that studies the conditional probability of adoption of social media over time. The Kaplan–Meier nonparametric survival technique is used to study the nature of social media adoption by the Indian banks. Employing Cox’s proportional hazard (CPH) regression model, we have tried to assess the effect of explanatory variables on the adoption hazard rate, that is, joining Facebook. It appears that private sector banks are keen to join Facebook than public sector banks. The empirical analysis suggests that banks with higher non-interest income, intermediation cost and return on assets are inclined to adopt the technological innovations rapidly. The bank with greater ATM coverage is more likely to join Facebook. Medium/small-sized banks tend to be faster in joining Facebook. Banks with higher non-performing assets (NPAs) are yet to join Facebook. However, the number of branches is not associated with joining Facebook.