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Information Technology and Banking Organization

Author

Listed:
  • Sauro Mocetti

    (Bank of Italy)

  • Marcello Pagnini

    (Bank of Italy)

  • Enrico Sette

    (Bank of Italy)

Abstract

We investigate the impact of information and communication technologies (ICT) on local branch managers’ (LBMs) autonomy in small business lending. Using a unique dataset of nearly 300 Italian banks, we show that banks holding more ICT capital delegate more decision-making power to their LBMs. Evidence from a variety of identification strategies suggests that our results are not driven by unobserved heterogeneity. We also find that the positive effect of ICT on delegation is stronger for banks resorting more to soft information (i.e. those specialized in small business lending and with a longer permanence of LBMs in the same branch).

Suggested Citation

  • Sauro Mocetti & Marcello Pagnini & Enrico Sette, 2017. "Information Technology and Banking Organization," Journal of Financial Services Research, Springer;Western Finance Association, vol. 51(3), pages 313-338, June.
    • Handle: RePEc:kap:jfsres:v:51:y:2017:i:3:d:10.1007_s10693-016-0244-3
    DOI: 10.1007/s10693-016-0244-3
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    More about this item

    Keywords

    ICT; Delegation; Banking organization; Local branch manager; Small business lending;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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