MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  HUYNH MINH SU EMPIRICAL ANALYSIS OF INTERNET BANKING ADOPTION MASTER THESIS OF BUSINESS ADMINISTRATION HO CHI MINH CITY - 2013 MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  HUYNH MINH SU EMPIRICAL ANALYSIS OF INTERNET BANKING ADOPTION Subject: Master of Business Administration Code: 60.34.01.02 MASTER THESIS OF BUSINESS ADMINISTRATION SUPERVISOR: PhD PHAM QUOC HUNG HO CHI MINH CITY - 2013 I ACKNOWLEDGEMENT For the successful completion of this thesis, I would like to extend my sincere thanks to: Respectful lecturers of University of Economics Ho Chi Minh City, who have empowered me with useful knowledge during the time I studied at the eMBA course, especially PhD Pham Quoc Hung, who have enthusiastically instructed me to approach relevant problems in reality, research methods, as well as the contents of the thesis Students of many universities, especially University of Economics Ho Chi Minh City, customers of many banks in Vietnam, especially BIDV and Sacombank, and all my friends, especially eMBA class for kindly helping me to collect information necessary for the study My special thanks also go to Mr Dang Huu Phuc for his strong support in the implementation of the data analysis and the completion of the thesis Though the author has tried the best to complete the thesis, errors could not be completely avoided Consequently, the author is looking forward to receiving the contributions and comments from respectful lecturers and friends Huynh Minh Su Ho Chi Minh, 19 September 2013 II COMMITMENT I would like to commit that this thesis, “Empirical of online banking adoption”, was accomplished based on my independent and serious researchs The data was collected in reality and has obvious origins Moreover, the data was trustworthily handled by author I certify that any help hand received in preparing this thesis and all the sources that used have been acknowledged Ho Chi Minh, 19 September 2013 Huynh Minh Su Signature: _ III TABLE OF CONTENTS ACKNOWLEDGEMENT I  COMMITMENT II  TABLE OF CONTENTS III  LIST OF TABLES VI  LIST OF FIGURES VIII  ABSTRACT 1  CHAPTER 2  INTRODUCTION 2  1.1 Overview 2  1.2 The research approach 2  1.3 Background of the study 3  1.4 Motivation of the study 4  1.5 Objective of the study 4  1.6 Problem discussion 5  1.6.1 Problem definition 5  1.7 Research question 6  1.8 Practical and theoretical value of this research 6  1.9 Structure of the study 7  CHAPTER 9  LITERATURE REVIEW 9  2.1 Internet banking 9  2.1.1 Conception of internet banking 9  2.1.2 Benefits of internet banking 10  2.1.2.1 Benefits for banks 10  2.1.2.2 Benefits for customers 11  2.1.3 International studies of consumer adoption of internet banking 12  2.2 Adoption 30  2.3 Theoretical framework 31  2.3.1 Technology acceptance model (TAM) 31  IV 2.4 Trust and TAM 31  2.5 Research model 32  2.6 Summary 36  CHAPTER 37  METHODOLOGY 37  3.1 Research purpose 37  3.2 Questionnaire development 37  3.2.1 Independent variables 38  3.2.1.1 Perceived Benefit 38  3.2.1.2 Trust 39  3.2.2 Dependent variable: Intention to Use / Reuse Internet banking 39  3.2.3 Moderator variable: Internet Experience 40  3.3 Questionnaire translation 42  3.4 Research strategy 43  3.5 Targeted population 44  3.6 Research sampling 45  3.6.1 Sample size 45  3.6.2 Selecting the sampling technique 45  3.7 Data collection 46  3.8 Methods of data analysis 46  3.8.1 Data screening 47  3.8.2 Reliability assessment of measurement scales (Cronbach alpha) 47  3.8.3 Validity assessment of measurement scales (EFA) 47  3.8.4 Correlation Analysis 48  3.8.5 Multiple Regression (MR) 48  3.9 Research process 49  3.10 Summary 51  CHAPTER 52  DATA ANALYSIS 52  4.1 Descriptions of sample 52  4.2 Reliability and validity of the measurement scale 53  V 4.2.1 Reliability (Cronbach alpha) 53  4.2.2 Exploratory factor analysis (EFA) 55  4.2.2.1 EFA implementation for independent variables 57  4.2.2.2 EFA implementation for dependent variable 59  4.3 Testing the research model and the hypotheses 60  4.3.1 Testing correlations of constructs 60  4.3.2 Checking regression assumptions 62  4.3.3 Multiple regression analysis 62  4.3.3.1 Testing the effects of Perceived Benefit (PB) and Trust (T) on Intention to Use / Reuse (IU) 62  4.3.3.2 Testing the moderating effects 66  4.4 Summary 73  CHAPTER 74  CONCLUSION 74  5.1 Discussion 74  5.2 Practical implication of the research 76  5.3 Academic contributions of the study 79  5.4 Limitation and futher research 79  REFERENCES 81  APPENDICES 91  APPENDIX A 91  ACRONYMS 91  APPENDIX B 92  THE QUESTIONNAIRE 92  APPENDIX C 95  CRONBACH ALPHA ANALYSIS 95  APPENDIX D 98  EXPLORATORY FACTOR ANALYSIS (EFA) 98  APPENDIX E 109  GRAPHIC ANALYSIS OF REGRESSION ASSUMPTIONS 109  APPENDIX F 112  MULTIPLE REGRESSION ANALYSIS (MR) 112  VI LIST OF TABLES Table 2-1 International studies on internet banking adoption 13  Table 3-1 Survey items used in the study .41  Table 3-2 Relevant situation for different research strategies 43  Table 3-3 Summary 44  Table 4-1 Demographic characteristics 53  Table 4-2 Cronbach alpha coefficients .54  Table 4-3 Details of the unqualified observation variable .58  Table 4-4 EFA results of independent and dependent variables 58  Table 4-5 Detail of the unqualified observation variable 60  Table 4-6 Correlations 61  Table 4-7 MR results using Enter technique 63  Table 4-8 ANOVA 63  Table 4-9 MR variables coefficients 64  Table 4-10 Results of hypothesis tests .65  Table 4-11 MR having moderating effect results 67  Table 4-12 ANOVA having moderating effect results 67  Table 4-13 MR variables coefficients having moderating effect results 68  Table 4-14 MR results using Enter technique on case (less than one year) 70  Table 4-15 ANOVA on case (less than one year) 70  Table 4-16 MR variables coefficients having moderating effect on case (less than one year) 70  VII Table 4-17 MR having moderating effect results using Enter technique on case (one year or longer) 71  Table 4-18 ANOVA having moderating effect on case (one year or longer) .72  Table 4-19 MR variables coefficients having moderating effect on case (one year or longer) 72  VIII LIST OF FIGURES Figure 1-1 Structure of the Study .8  Figure 2-1 Proposed research model 32  Figure 3-1 Research process 50  Figure 4-1 The research model .63  Figure 4-2 The research model .66  101 Total Variance Explained Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings Co % of % of % of mpo Varianc Cumulati Varianc Cumulati Varianc Cumulati nent Total e ve % Total e ve % Total e ve % 9.230 54.296 54.296 9.230 54.296 1.704 10.022 64.318 1.704 10.022 1.266 7.446 71.764 1.266 7.446 690 4.057 75.822 619 3.640 79.462 533 3.133 82.595 423 2.489 85.084 396 2.326 87.410 334 1.968 89.378 10 312 1.838 91.216 11 284 1.672 92.888 12 263 1.546 94.434 13 254 1.494 95.928 14 197 1.160 97.088 15 189 1.109 98.197 16 158 932 99.129 17 148 871 100.000 Extraction Method: Principal Component Analysis 54.296 4.488 64.318 3.960 71.764 3.752 Rotated Component Matrixa Component T_4 T_2 T_5 T_3 T_1 857 809 798 790 771 315 326 26.403 23.292 22.069 26.403 49.695 71.764 102 T_6 581 341 PB_3 858 PB_2 841 PB_1 780 PB_4 774 PB_5 353 622 PB_6 424 470 430 IU_6 824 IU_5 769 IU_2 350 346 733 IU_4 330 725 IU_1 362 320 703 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations Component Matrixa Component T_3 IU_2 T_5 IU_1 PB_6 IU_4 PB_3 PB_2 T_1 T_4 T_2 IU_5 822 817 805 793 763 747 747 744 739 727 724 704 -.338 -.330 -.365 -.313 -.374 467 450 -.377 -.483 -.366 -.449 103 IU_6 689 -.524 PB_4 686 436 PB_1 685 450 PB_5 666 T_6 637 Extraction Method: Principal Component Analysis a components extracted Appendix D-3 The third EFA implementation of two independent variables and the dependent variable (after remove disqualified variables: PB_6 and IU_3) KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Approx Chi-Square Sphericity df Sig .938 3.757E3 120 000 Total Variance Explained Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings Co % of % of % of mpo Varianc Cumulati Varianc Cumulati Varianc Cumulati nent Total e ve % Total e ve % Total e ve % 8.677 54.231 1.701 10.628 1.266 7.912 689 4.307 616 3.852 468 2.927 415 2.595 340 2.126 54.231 8.677 54.231 64.860 1.701 10.628 72.771 1.266 7.912 77.079 80.930 83.857 86.452 88.579 54.231 4.333 27.084 64.860 3.734 23.334 72.771 3.576 22.353 27.084 50.419 72.771 104 326 2.040 90.619 10 284 1.778 92.397 11 263 1.645 94.042 12 261 1.628 95.670 13 197 1.233 96.903 14 189 1.178 98.082 15 159 992 99.074 16 148 926 100.000 Extraction Method: Principal Component Analysis Rotated Component Matrixa Component T_4 858 T_2 810 T_5 800 316 T_3 792 327 T_1 771 T_6 582 341 PB_3 859 PB_2 844 PB_1 780 PB_4 774 PB_5 355 619 IU_6 825 IU_5 772 IU_2 352 344 732 IU_4 333 726 IU_1 363 316 703 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization 105 Rotated Component Matrixa Component T_4 858 T_2 810 T_5 800 316 T_3 792 327 T_1 771 T_6 582 341 PB_3 859 PB_2 844 PB_1 780 PB_4 774 PB_5 355 619 IU_6 825 IU_5 772 IU_2 352 344 732 IU_4 333 726 IU_1 363 316 703 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations Component Matrixa Component T_3 IU_2 T_5 IU_1 IU_4 827 816 810 792 749 -.332 -.330 -.358 -.313 -.373 106 PB_3 746 472 PB_2 745 456 T_1 737 -.375 T_4 733 -.477 T_2 727 -.361 IU_5 708 -.449 IU_6 689 -.524 PB_4 685 441 PB_1 683 455 PB_5 663 T_6 639 Extraction Method: Principal Component Analysis a components extracted Appendix D-4 The fourth EFA implementation of two independent variables and the dependent variable (after remove disqualified variables: PB_6 and IU_3) KMO and Bartlett's Test Kaiser-Meyer-Olkin Measure of Sampling Adequacy Bartlett's Test of Approx Chi-Square Sphericity df Sig .938 3.757E3 120 000 Total Variance Explained Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings Co % of % of % of mpo Varianc Cumulati Varianc Cumulati Varianc Cumulati nent Total e ve % Total e ve % Total e ve % 8.677 54.231 1.701 10.628 54.231 8.677 54.231 64.860 1.701 10.628 54.231 4.333 64.860 3.734 27.084 23.334 27.084 50.419 107 1.266 7.912 72.771 1.266 689 4.307 77.079 616 3.852 80.930 468 2.927 83.857 415 2.595 86.452 340 2.126 88.579 326 2.040 90.619 10 284 1.778 92.397 11 263 1.645 94.042 12 261 1.628 95.670 13 197 1.233 96.903 14 189 1.178 98.082 15 159 992 99.074 16 148 926 100.000 Extraction Method: Principal Component Analysis 7.912 72.771 3.576 Rotated Component Matrixa Component T_4 T_2 T_5 T_3 T_1 T_6 PB_3 PB_2 PB_1 PB_4 PB_5 IU_6 858 810 800 792 771 582 859 844 780 774 619 825 22.353 72.771 108 IU_5 IU_2 IU_4 IU_1 772 732 726 703 Extraction Method: Principal Component Analysis Rotation Method: Varimax with Kaiser Normalization a Rotation converged in iterations Component Matrixa Component T_3 827 IU_2 816 T_5 810 IU_1 792 IU_4 749 PB_3 746 472 PB_2 745 456 T_1 737 T_4 733 -.477 T_2 727 IU_5 708 -.449 IU_6 689 -.524 PB_4 685 441 PB_1 683 455 PB_5 663 T_6 639 Extraction Method: Principal Component Analysis a components extracted 1099 APPEN NDIX E GRA APHIC ANALYSIIS OF RE EGRESSIO ON ASSU UMPTION NS 1100 111 112 APPENDIX F MULTIPLE REGRESSION ANALYSIS (MR) Appendix F-1 Correlation Correlations M_PB M_PB Pearson Correlation M_T 576** 636** 000 000 302 302 302 576** 664** Sig (2-tailed) N M_T Pearson Correlation M_IU Sig (2-tailed) 000 N 302 302 302 636** 664** 000 000 M_IU Pearson Correlation Sig (2-tailed) 000 N 302 302 302 ** Correlation is significant at the 0.01 level (2tailed) Appendix F-2 Multiple regression analysis for dependent variable and independent variables Model Summaryb Mode l R 733a R Square 537 Adjusted R Std Error of Square the Estimate 534 a Predictors: (Constant), M_T, M_PB b Dependent Variable: M_IU 73652 113 ANOVAb Sum of Squares Model Mean Square df Regression 188.125 Residual 162.196 299 Total 350.322 301 F Sig .000a 94.063 173.399 542 a Predictors: (Constant), M_T, M_PB b Dependent Variable: M_IU Coefficientsa Unstandardized Standardized Coefficients Coefficients Model B Std Error Beta Collinearity Statistics t Sig Tolerance VIF (Constant) 1.486 215 6.910 000 M_PB 349 044 379 7.871 000 669 1.495 M_T 449 a Dependent Variable: M_IU 048 446 9.271 000 669 1.495 Collinearity Diagnosticsa Mode Dime Eigenvalu l nsion e Variance Proportions Condition Index (Constant) M_PB M_T 2.953 1.000 00 00 00 026 10.621 97 33 11 11.962 03 67 89 021 a Dependent Variable: M_IU Residuals Statisticsa Minimu Maximu m m Predicted Value 2.7327 7.0699 Mean 5.4113 Std Deviation 79057 N 302 114 Residual -2.60704 3.02440 Std Predicted -3.388 2.098 Value Std Residual -3.540 4.106 a Dependent Variable: M_IU 00000 73407 302 000 1.000 302 000 997 302 Appendix F-3 Multiple regression analysis for dependent variable and independent variables having moderating effect Model Summaryc Model R Change Statistics Std Error of R R Adjusted the Square F Sig F DurbinSquare R Square Estimate Change Change df1 df2 Change Watson 733a 537 534 73652 744b 553 547 72599 a Predictors: (Constant), M_T, M_PB b Predictors: (Constant), M_T, M_PB, IE_recode_PB, IE_recode_T c Dependent Variable: M_IU ANOVAc Sum of Squares Model 537 173.399 016 5.367 Mean Square df Regression 188.125 Residual 162.196 299 Total 350.322 301 Regression 193.782 48.446 Residual 156.539 297 527 299 297 F 94.063 173.399 Sig .000a 542 Total 350.322 301 a Predictors: (Constant), M_T, M_PB b Predictors: (Constant), M_T, M_PB, IE_recode_PB, IE_recode_T c Dependent Variable: M_IU 91.915 000b 000 005 1.983 115 Coefficientsa Unstandardized Standardized Coefficients Coefficients Model B Std Error Beta Collinearity Statistics t Sig Tolerance VIF (Constant) 1.486 215 6.910 000 M_PB 349 044 379 7.871 000 669 1.495 M_T 449 048 446 9.271 000 669 1.495 (Constant) 1.273 225 5.654 000 M_PB 389 046 423 8.405 000 595 1.682 M_T 448 051 445 8.781 000 585 1.709 -.132 049 -.139 -2.716 007 578 1.730 IE_recode_T 007 a Dependent Variable: M_IU 051 887 569 1.758 IE_recode_P B 007 142 ...MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HO CHI MINH CITY  HUYNH MINH SU EMPIRICAL ANALYSIS OF INTERNET BANKING ADOPTION Subject: Master of Business Administration... reports the findings of a study issues concerning the adoption of Internet banking in Vietnam This study investigates customers’ adoption within the context of Vietnam Internet Banking services and... influencing adoption of Internet banking by Vietnamese customers?  What is the role of Internet experience in acceptance of Internet banking? 1.8 Practical and theoretical value of this research