## Does IT Help? Information Technology in Banking and Entrepreneurship

_IMF Working Papers, August 6, 2021_

## Source details

**Canonical URL:** [Does IT Help? Information Technology in Banking and Entrepreneurship](https://www.imf.org/en/publications/wp/issues/2021/08/06/does-it-help-information-technology-in-banking-and-entrepreneurship-462911)

## Other formats

- [Markdown version](/en/publications/wp/issues/2021/08/06/does-it-help-information-technology-in-banking-and-entrepreneurship-462911/index.md)
- [Structured JSON version](/en/publications/wp/issues/2021/08/06/does-it-help-information-technology-in-banking-and-entrepreneurship-462911/index.json)
- [Bundle manifest](/en/publications/wp/issues/2021/08/06/does-it-help-information-technology-in-banking-and-entrepreneurship-462911/bundle-manifest.json)

## Bibliographic details
- Authors: Toni Ahnert, Sebastian Doerr, Nicola Pierri, Yannick Timmer
- Published: August 6, 2021
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513591803.001

---

### Authors and publication
- By Toni Ahnert, Sebastian Doerr, Nicola Pierri, Yannick Timmer
- August 6, 2021
- IMF Working Papers, Working Paper No. 2021/214
- Pages: 57
- Volume: 2021
- Issue: 214
- DOI: https://doi.org/10.5089/9781513591803.001
- Stock No: WPIEA2021214
- ISBN: 9781513591803
- ISSN: 1018-5941

### Research question and theoretical framework
- Examines the importance of information technology (IT) in banking for entrepreneurship.
- Builds a parsimonious model of bank screening and lending that predicts:
  - IT in banking can spur entrepreneurship by making it easier for startups to borrow against collateral.

### Empirical strategy and key empirical findings
- Empirical setting: U.S. counties with differential exposure to IT-intensive banks.
- Main empirical findings:
  - Job creation by young firms is stronger in U.S. counties that are more exposed to IT-intensive banks.
  - Entrepreneurship increases more in IT-exposed counties when house prices rise, consistent with a strengthened collateral lending channel for IT banks.
  - IT in banking increases startup activity without diminishing startup quality.
  - IT in banking weakens the importance of geographical distance between borrowers and lenders.

### Interpretation and implications
- Results suggest that banks' IT adoption can increase dynamism and productivity by:
  - Facilitating collateral-based lending to startups.
  - Expanding access to credit for geographically distant borrowers.
  - Supporting job creation by young firms without reducing startup quality.

### Subject areas and keywords
- Subject: Collateral, Employment, Financial institutions, Job creation, Labor, Self-employment, Technology
- Keywords: bank screening, banks' IT adoption, collateral, Collateral, Employment, entrepreneurship, importance of information technology, information technology, IT in banking, Job creation, screening, Self-employment, startup activity, technology in banking

*Source: IMF Working Paper "Does IT Help? Information Technology in Banking and Entrepreneurship" (August 6, 2021).*

---

## Content in this bundle

- **Working Paper**
  - [Working Paper (Markdown version)](/-/media/files/publications/wp/2021/english/wpiea2021214-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Working Paper (PDF)](/-/media/files/publications/wp/2021/english/wpiea2021214-print-pdf.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2021/08/06/does-it-help-information-technology-in-banking-and-entrepreneurship-462911_