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DOES BANK TECHNOLOGY AFFECT SMALL BUSINESS LENDING DECISIONS?
Author(s) -
Sedunov John
Publication year - 2017
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/jfir.12116
Subject(s) - endogeneity , portfolio , business , affect (linguistics) , competition (biology) , information technology , economics , finance , econometrics , computer science , biology , operating system , ecology , linguistics , philosophy
I examine the effect that technology has on soft‐information lending and address issues within the banking literature on quantifying bank technology. I find that banks engage in less soft‐information lending when back‐office bank technology is more productive and that banks engage in less soft‐information lending when they own interactive web technology. I find that competition, lending decisions, and bank size are the primary drivers of technological development. I show that these results are robust to econometric tests that account for endogeneity, to an alternative definition of the bank's size, and to the inclusion of lending portfolio controls.