Bank Performance and the Solow Paradox by Hasan Doluca

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Bank Performance and the Solow Paradox

Author : Hasan Doluca

Publisher : SSRN

Published : 2013

ISBN-10 :

ISBN-13 :

Number of Pages : 33 Pages

Language : en

Descriptions Bank Performance and the Solow Paradox

The problem of legacy information technologies in conjunction with the excessive risks associated with the implementation of huge information technologies such as Enterprise Resource Planning systems have a potential to lead to bank failures, and thus, financial instability. Hence, using a unique data-set of 157 U.S. banks from 1993 to 2006, and differentiating between hardware and software technologies operationalized by the investment in Enterprise Resource Planning systems and information technology services operationalized by the information technology expertise of the banks, we assess the effects of information technology investments on bank performance. We find, at first glance, that the usage of Enterprise Resource Planning systems has a negative, direct effect on bank performance, indicating the existence of the commonly-known Solow Paradox. However, we provide an explanation for the existence of this paradox by addressing potential endogeneity problems: by controlling for the endogeneity, our results suggest that Enterprise Resource Planning systems have a positive effect on bank performance. We further show that the effect of Enterprise Resource Planning systems on bank performance may be strengthened by bank size. Regarding information technology services, we show that it has a positive, direct effect on bank performance. Additionally, banks that use Enterprise Resource Planning systems should have high information technology expertise as information technology expertise positively correlates with bank performance and moderates the impact of Enterprise Resource Planning systems. Our results are robust to different measures of performance such as return on assets, return on equity and efficiency measures, computed using Stochastic Frontier Analysis.

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Results Bank Performance and the Solow Paradox

FS: The Performance Paradox - International Banker - People don't trust banks. And they don't trust insurers either. In fact, they don't trust financial institutions, full stop. So when you're a financial services provider, generally speaking, you're not starting from a position of power in any high-street best-loved list. ... The Performance Paradox. by internationalbanker November 23

In search of a rational foundation for the massive IT boom in the - The Solow Paradox does not hold for Australian banks. Abstract. Information technology (IT) is meant to improve bank performance by lowering operational costs and improving the process of financial intermediation of banks. ... The relationship between bank performance and its determinants has remained a contentious issue, as highlighted in the

Is the Solow Paradox back? | McKinsey - Economist Robert Solow famously said in 1987 that the computer age was everywhere except for the productivity statistics. This phenomenon, which became known as the Solow Paradox, was resolved in the 1990s when a few sectors—technology, retail, and wholesale—led an acceleration of US productivity growth. In part, the 1990s productivity boom

Bank Performance and the Solow Paradox | Request PDF - ResearchGate - We find, at first glance, that the usage of Enterprise Resource Planning systems has a negative, direct effect on bank performance, indicating the existence of the commonly-known Solow Paradox

Technological diffusion, banking efficiency and Solow's paradox: A - Acemoglu et al. (2014) contend that while Solow's paradox has largely been resolved in IT-intensive industries, questions remain over productivity increases in IT-using ... Bank performance and the Solow paradox. OS&E Research Seminar, Rotterdam (2012), 10.2139/ssrn.2334878. Google Scholar. Dong, 2010

Indonesia Economic Prospects (IEP) - World Bank - The Indonesia Economic Prospects (IEP), a successor of the Indonesia Economic Quarterly, is a six-monthly World Bank report that aims to provide an impartial and up-to-date assessment of recent global and domestic macroeconomic developments, outlook, risks, and specific development challenges for the Indonesian economy

Bank Performance and the Solow Paradox by Hasan Doluca, Hüseyin Doluca - Hence, using a unique data-set of 157 banks from 1993 to 2006, and differentiating between hardware and software technologies operationalized by the investment in Enterprise Resource Planning systems and information technology services operationalized by the information technology expertise of the banks, we assess the effects of

Bank Performance and the Solow Paradox | Semantic Scholar - The problem of legacy information technologies in conjunction with the excessive risks associated with the implementation of huge information technologies such as Enterprise Resource Planning systems have a potential to lead to bank failures, and thus, financial instability. Hence, using a unique data-set of 157 banks from 1993 to 2006, and differentiating between hardware and software

Bank Market Power and Firm Performance* - Oxford Academic - The timing of the variables is in line with the idea that the firms with certain characteristics at time t − 1 will seek to obtain a loan at time t from a bank (or a number of banks) with a level of market power Lerner at that time t. In addition, banks with a specific Lerner at time t will check the available financial statements of the firms from the previous period t − 1 to decide on

Bank Performance Definition | Law Insider - Examples of Bank Performance in a sentence. Schedule RC-S, item 6.a, column C.(Include comparable data on managed credit card receivables for any affiliated savings association.)OR(2) are credit card specialty banks as defined for purposes of the Uniform Bank Performance Report (UBPR).. Memorandum items 2 and 3 are to be completed by banks that (1) together with affiliated institutions, have

On Network Competition and The Solow Paradox: Evidence From Us Banks - echo the so-called Solow paradox in concluding that IT will actually decrease productivity. ... The relationship between IT expenditures and bank's financial performance or market share is conditional on the extent of the network effect. If the network effect is insignificant, IT expenditures are likely to (i) reduce payroll expenses, (ii

Can we solve the international productivity paradox? Evidence from - However, the empirical evidence has failed to reach a consensus on the precise effects of IT on bank performance as some find evidence to concur with the Solow Paradox, while others contradict

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Evaluating the Performance of Investments in IT: Reflections on the - Discussion about the evaluation of the performance of investment in technology was dominated for a long time — and in certain respects still is today — by what Solow (1987) referred to as the "productivity paradox". Solow sought to examine the relationship between technology and performance by evaluating the various inputs involved in

In Search of A Rational Foundation For The Massive It Boom In The - Information technology (IT) is meant to improve bank performance by lowering operational costs and improving the process of financial intermediation of banks. However, the empirical evidence has failed to reach a consensus on the precise effects of IT on bank performance as some find evidence to concur with the Solow Paradox, while others

On Network Competition and The Solow Paradox: Evidence From Us Banks - proﬁts. Some studies4 echo the so-called Solow paradox in concluding that IT will actually decrease productivity. As stated by Solow (1987), 'you can see the computer age everywhere these days, except in the productivity statistics'. Shu and Strassmann (2005) studied 12 banks operating in the USA for the

Bruce H. - Chief Information Security Officer - LinkedIn - • Experienced IT professional in multiple industries (logistic, telecommunication, education, financial services, media, and investment) and proven track record of applying appropriate techhnologies.• Exceptional analytical and problem-solver with good ability to resolve technology issues, provide for system enhancements, analyze / define business process for

Bank Performance and the Solow Paradox | Semantic Scholar - However, we provide an explanation for the existence of this paradox by addressing potential endogeneity problems: by controlling for the endogeneity, our results suggest that Enterprise Resource Planning systems have a positive effect on bank performance

- Empirical studies, however, have shown inconsistency, the so-called Solow paradox, which we explain by stressing the heterogeneity in banking services. In a differentiated model, we characterize the conditions to identify these two effects and explain how the two seemingly positive effects turn negative

ON NETWORK COMPETITION AND THE SOLOW PARADOX: EVIDENCE FROM - For the US banks, we conclude that banks' profits are negatively related to IT expenditure, showing that the weighted sum of IT is less than the average of IT. As the impact on market share is insignificant, the average IT expenditure appears to have a negative effect in influencing profitability

The modern Solow paradox. In search for explanations - The first important conclusion is that the modern Solow paradox is even more complex than in the 1980s, due to the heterogeneous nature of the technologies involved. In fact, the adoption of intelligent automation produces different effects from the adoption of advanced digital technologies

Bank Performance and the Solow Paradox by Hasan Doluca - Our results are robust to different measures of performance such as return on assets, return on equity and efficiency measures, computed using Stochastic Frontier Analysis. Keywords: bank, performance, efficiency, IT, ERP, Solow, paradox JEL Classification: G20, G21, N22, O14 Suggested Citation:

IS THE SOLOW PARADOX BACK? - McKinsey & Company - When the Solow Paradox was unwinding, companies such as AMD, Costco, Dell, Intel, McKesson, Target, Walmart, and a handful of others flourished at the same time as they drove disproportionate, economy-wide productivity improvement. The potential for outsize gains could be even greater this