IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v70y2024i2p773-798.html
   My bibliography  Save this article

High-Speed Internet, Financial Technology, and Banking

Author

Listed:
  • Angelo D’Andrea

    (Financial Stability Directorate, Bank of Italy, 00184 Rome, Italy)

  • Nicola Limodio

    (Department of Finance, Bocconi University, 20136 Milan, Italy; Baffi Centre for Applied Research on International Markets, Banking, Finance and Regulation (BAFFI CAREFIN), Bocconi University, 20136 Milan, Italy; Center for Economic Policy Research, Bocconi University, 20136 Milan, Italy)

Abstract

Exploiting the staggered arrival of fiber-optic submarine cables, we show that high-speed internet promotes the role of banks and credit in Africa. Variation within country and across multicountry bank networks indicates that high-speed internet induced a 22% expansion in credit supply. We investigate the role of plummeting telecommunication costs in promoting the bank adoption of new financial technologies and study a specific technology used in the interbank market, the real-time gross settlement system (RTGS). We find that upon connecting to high-speed internet, banks adopt the RTGS more extensively, reduce inside liquidity, and increase interbank transactions and lending. We also observe that high-speed internet particularly strengthens firms in countries with weak preexisting interbank markets.

Suggested Citation

  • Angelo D’Andrea & Nicola Limodio, 2024. "High-Speed Internet, Financial Technology, and Banking," Management Science, INFORMS, vol. 70(2), pages 773-798, February.
    • Handle: RePEc:inm:ormnsc:v:70:y:2024:i:2:p:773-798
    DOI: 10.1287/mnsc.2023.4703
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.2023.4703
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.2023.4703?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:70:y:2024:i:2:p:773-798. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.