MACROECONOMIC DETERMINANTS OF RADICAL INNOVATIONS
         AND INTERNET BANKING IN EUROPE

                             Erhan Atay, Associate Professor PhD
                             Trakya University of Edirne, Turkey,
                                  naftalanjam@yahoo.com


ABSTRACT: Current technological development has various implications for the banking
sector. Especially, the banks prefer internet banking to keep up their customers, reduce
transaction costs, enhance their customers’ portfolio, and accelerate financial transactions.
In this regard, this study aims at finding out the use of intensity of internet banking. Extensive
technological innovation boosts internet banking. Banks use internet services as an
aggressive business strategy to gain market share rather than for making profits. The
importance of the innovation for the banking sector is that the competition forces banks to be
innovative in order to survive in the market. In the macroeconomic level, R&D expenditures,
education expenditures, skilled human capital, level of the information and communication
infrastructure and the accessing the internet by the individuals, patent protection laws, the
level of the competition in national and international markets, the cost of inputs such as
energy or wages can affect the innovation.

Keywords: Radical Innovation, Internet Banking, Macroeconomy

JEL Codes: O31, O32, O39