Information technology and banking organization

Sauro Mocetti, Marcello Pagnini () and Enrico Sette

No 752, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We investigate the impact of information and communication technologies (ICT) on local loan officers� autonomy in small business lending. We derive a simple agency model of the interaction between a local branch manager and the headquarters, which yields an estimable equation for the optimal delegation of authority. Using a unique and specifically tailored dataset including about 300 Italian banks, we show that banks equipped with more ICT capital and resorting to credit scoring delegate more decision-making power to their local branch managers. These results are robust to many additional controls, including instrumental variable estimation. The effects on decentralization are strengthened for those banks that jointly hold higher ICT capital endowments and adopt credit scoring.

Keywords: ICT; credit scoring; delegation; banking organization; local branch manager; small business lending (search for similar items in EconPapers)
JEL-codes: L22 M54 O33 (search for similar items in EconPapers)
Date: 2010-03
New Economics Papers: this item is included in nep-ban and nep-ict
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Related works:
Journal Article: Information Technology and Banking Organization (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_752_10

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