خروجی و سهم سود فن آوری اطلاعات و سرمایه گذاری های تبلیغاتی در بانک

This paper examines the contribution of investments in Information Technology (IT) and in advertising to the output and profits of Spanish banks, in the period 1983–2003. We find that the growth in the stock of IT capital explains one third of output growth of banks, and that an additional investment in IT of one million euros may be substituted for twenty-five workers. The paper also finds that advertising investments increase the demand for bank services with an elasticity of 0.22 for deposits and 0.11 for loans. For all the assets considered, the null hypothesis that banks use the profit-maximizing amount of services per period cannot be rejected with the data.

Information technology (IT) and advertising capital increasingly substitute physical capital and labor in the production and sale of banking services. Data on Spanish banks used in this paper show that the average stock of IT capital per bank, in 2003, is ten times larger than what it was in 1983; in the same period, the average stock of capital accumulated through advertising expenditures has been multiplied by a factor of 2.4. However, the average stock of physical capital, and the average number of employees per bank in year 2003, is 1.6 times that of 1983. Economics and business scholars have expressed concern about the true contribution of large investments in IT capital to the productivity and profitability of firms,1 but, somewhat surprisingly, the consequences of the shift toward a more intensive use of immaterial assets in banks have not been given much attention in the literature.2 This paper models the multi-branch, multi-asset banking firm and examines contributions to the productivity and profitability of services from labor, and from a list of capital inputs, including physical (branches), information technology (IT) and advertising capital. The model specifies if a particular input is valuable for the bank because it increases production (i.e. it is a production function input), because it increases the demand for loans or the supply of deposits for a given price, or both. We use data from the confidential accounting statements of Spanish banks during the period 1983–2003, to test the assumptions on the production technology, on the demand function of bank services, and on the profit-maximizing conditions of the use of services from labor and capital inputs. In the process, the paper provides estimates of the production and demand elasticity of input services, and of the price elasticity of demand for bank loans and deposits. In addition to providing new evidence on the contribution to productivity and profitability of investment in immaterial inputs of IT and advertising, the paper also tests for scale economies at the branch and at the bank level.

Little is known about the contribution of IT capital to the growth and profitability of banks. The stock of IT capital has been the only productive asset that has increased steadily during the period 1983 to 2003, among the Spanish banks studied in this paper. This occurs while total labor, physical capital and advertising capital of the banking industry remain constant or decrease, in real terms, over the same time period. According to the marginal rate of substitution between IT and labor estimated in the paper, a one-million euro increment in IT capital per bank implies a reduction of 25 workers per bank. IT capital contributes to the output produced by banks, and its growth explains up to one-third of the annual growth rate in the output of banks. However, no evidence is found that IT capital increases the demand for loans or the supply of deposits (value-enhancing input). Overall, the estimated contribution of IT capital to the output of banks is just what would be expected from the profit-maximizing condition of marginal productivity equal to marginal cost. Therefore, the demand for IT capital services by Spanish banks is just that predicted by the profit-maximizing conditions.29 Together with the examination of contributions to the productivity and profitability of IT capital, this paper also provides evidence for the contribution of other inputs to the output and the demand for bank services. Particularly, it studies the role played by labor, physical capital (investment per branch and number of branches) and advertising capital on the demand and supply side of banking services. Furthermore, the estimations of the demand functions of services provide estimates of the price elasticity of loans and deposits. The empirical findings indicate that banks produce their output at branch level through a combination of services from labor and from IT capital, under a constant-returns-to-scale production function. The output from labor and IT capital cannot be expanded beyond the fixed capacity of the branch which, in turn, requires a fixed investment per branch. The output and inputs at bank level are just the product of output/inputs per branch times the number of branches; thus, the hypothesis of constant returns to scale at the bank level for the labor and IT capital cannot be rejected by the data. The results also indicate that the representative branch of banks does not operate at full capacity, but banks seem to open branches according to the profit-maximizing conditions of marginal return equal to the marginal cost of the investment.