Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/311105 
Year of Publication: 
2024
Series/Report no.: 
ECB Working Paper No. 2956
Publisher: 
European Central Bank (ECB), Frankfurt a. M.
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.
Subjects: 
technology in banking
entrepreneurship
information technology
collateral
screening
JEL: 
D82
G21
L26
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-6766-2
Document Type: 
Working Paper

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