The Economic Effects of Technological Progress: Evidence from the Banking Industry

By Allen N. Berger. 2003

728 citations recorded by the source corpus.

This paper examines technological progress and its effects in the banking industry. Banks are intensive users of both IT and financial technologies, and have a wealth of data available that may be helpful for the general understanding of the effects of technological change. The research suggests improvements in costs and lending capacity due to improvements in "back-office" technologies, as well as consumer benefits from improved "front-office" technologies. The research also suggests significant overall productivity increases in terms of improved quality and variety of banking services. In addition, the research indicates that technological progress likely helped facilitate consolidation of the industry.

Subfields: Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/7a132496a3d06473705adecb9356e0ac7fa68ef1

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Citations in the corpus

Distance, Bank Heterogeneity and Entry in Local Banking Markets (2008, positive): “Berger et al (2002) offer theoretical arguments and find empirical evidence of the fact that large banks lend at greater distance than small banks. They interpret these findings as consistent with the idea that large banks are better equipped to collect and act on hard information. Degryse and Ongen”
Technological Progress and the Geographic Expansion of the Banking Industry (2002, neutral): “See Berger (2003) for a general review of technological progress in banking.”
Fintech and banking: What do we know? (2019, neutral): “For example, Berger (2003) discussed the productivity and consumer welfare implications of information technology for banking. And twenty years ago, in a discussion of consolidation in financial services, I concluded with the observation that the ongoing consolidation at that time was likely to be f”
On the Fintech Revolution: Interpreting the Forces of Innovation, Disruption, and Transformation in Financial Services (2018, background): “The respective themes include: the economics of electronic banking strategy and shared ATM networks [30, 87]; process variation as a basis for service quality and performance [58]; retail banking strategy when electronic distribution technology costs influence bank competition and performance [23]; ”
Accounting for the Rise in Consumer Bankruptcies (2010, neutral): “innovations could impact consumer borrowing: a reduction in the transaction cost of borrowing ( Berger (2003) ).”
Do Large Banks have Lower Costs? New Estimates of Returns to Scale for U.S. Banks (2009, methodology): “Moreover, reductions in the cost of acquiring quantifiable information about potential borrowers have eroded some of the benefits of small scale and close proximity to borrowers that enabled small banks traditionally to out-compete larger banks for some customers, such as small businesses (see Peter”
The impact of digital finance on household consumption: Evidence from China (2020, background): “For the traditional financial market, the development of digital finance will transform traditional financial departments, improve the quality and diversity of banking services, and increase the efficiency of financial services (Berger, 2003; Cortina and Schmukler, 2018).”
Quantifying the Impact of Financial Development on Economic (2010, neutral): “Berger (2003) discusses the importance of IT in accounting for productivity gains in the U.S. banking sector.”
Consolidation in the U.S. Banking Industry: Is the Long, Strange Trip About to End? (2005, neutral): “…on the merg 15 For more detailed discussions of technology and the effects it has had on the restructuring of the financial services sector, see Berger (2003), Berger and DeYoung (2002), the Group of Ten (2001), Hunter (2001), Mishkin and Strahan (1999), and Emmons and Greenbaum (1998).”
The Past, Present, and Probable Future for Community Banks (2004, neutral): “This is almost as big as the entire assets of the banking industry ($5.7 trillion) (Berger 2003).”
The Impact of Internet Banking on Bank Performance and Risk: The Indian Experience (2009, background): “In addition, industry analysis outlining the potential impact of Internet banking on cost savings, revenue growth and risk profile of the banks have also generated considerable interest and speculation about the impact of the Internet on the banking industry (Berger, 2003).”