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

43 Pages Posted: 30 Oct 2002

See all articles by Allen N. Berger

Allen N. Berger

University of South Carolina - Darla Moore School of Business; Wharton Financial Institutions Center; European Banking Center

Date Written: September 2002

Abstract

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.

Keywords: technological progress, productivity, banks, mergers, efficiency

JEL Classification: O30, G21, G28, G34

Suggested Citation

Berger, Allen N., The Economic Effects of Technological Progress: Evidence from the Banking Industry (September 2002). Available at SSRN: https://ssrn.com/abstract=332900 or http://dx.doi.org/10.2139/ssrn.332900

Allen N. Berger (Contact Author)

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States
803-576-8440 (Phone)
803-777-6876 (Fax)

Wharton Financial Institutions Center

Philadelphia, PA 19104-6367
United States

European Banking Center

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

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