Template-Type: ReDIF-Paper 1.0
Author-Name: Toni Ahnert
Author-X-Name-First: Toni 
Author-X-Name-Last: Ahnert 
Author-Name: Sebastian Doerr
Author-X-Name-First: Sebastian 
Author-X-Name-Last: Doerr
Author-Name: Nicola Pierri
Author-X-Name-First: Nicola
Author-X-Name-Last: Pierri
Author-Name: Yannick Timmer
Author-X-Name-First: Yannick 
Author-X-Name-Last: Timmer
Title: Does IT help? Information technology in banking and entrepreneurship
Abstract: We study the importance of information technology (IT) in banking for entrepreneurship. Guided by a parsimonious model, we establish that job creation by young firms is stronger in US counties more exposed to banks with greater IT adoption. We present evidence consistent with banks' IT adoption spurring entrepreneurship through a collateral channel: entrepreneurship increases by more in IT-exposed counties when house prices rise. Further analysis suggests that IT improves banks' ability to determine collateral values, in particular when collateral appraisal is more complex. IT also reduces the time and cost of disbursing collateralized loans.
Length: 61 pages
Creation-Date: 2022-02
File-URL: https://www.bis.org/publ/work998.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work998.htm
File-Format: text/html
Number: 998
Keywords: technology in banking, entrepreneurship, information technology, collateral, screening
Classification-JEL: D82, G21, L26
Handle: RePEc:bis:biswps:998