DOES BANK TECHNOLOGY AFFECT SMALL BUSINESS LENDING DECISIONS?

I examine the effect that technology has on soft-information lending and address issues within the banking literature on quantifying bank technology. I find that banks engage in less soft-information lending when back-office bank technology is more productive and that banks engage in less soft-information lending when they own interactive web technology. I find that competition, lending decisions, and bank size are the primary drivers of technological development. I show that these results are robust to econometric tests that account for endogeneity, to an alternative definition of the bank's size, and to the inclusion of lending portfolio controls.