Core, F. and De Marco, F. (2023). Information Technology and Credit: Evidence from Public Guarantees Management Science, 70(9):6202--6219.
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Affiliated author
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Publication year2023
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JournalManagement Science
This paper investigates whether banks' information technology (IT) can substitute for local branch presence in the provision of small business credit. Our identification strategy relies on loan-level data and the unique institutional features of the Italian public guarantee scheme during COVID-19. Despite the availability of online applications and low screening incentives, small business lending remains local even for first-time borrowers. However, IT partly mitigates the impact of local branch presence: banks with better IT provide more, cheaper, and faster guaranteed loans and lend more in areas where they have no bank branches, especially to first-time borrowers.