Abstract
The paper specifically analyzed the effects of information and communication technologies on the banking production in the West African Economic and Monetary Union. It thus provides new empirical evidence on this subject in an area where such a problem is poorly explored in the literature. A Cobb-Douglas production model on panel data was used to analyze the elasticity of production of banks in the Union in relation to their technological capital over the period 2010-2016. The panels corrected standard errors method was favored for estimating model. The results indicate that automatic teller machines directly improve the level of production of banks in the West African Economic and Monetary Union. This research therefore encourages all measures aimed at strengthening their use by banks in the Union. Keywords: Banks, banking production, ICT DOI: 10.7176/JESD/11-12-12 Publication date: June 30th 2020
Highlights
In the New York Times book review in 1987, Robert Solow said, « You can see the computer age everywhere but in the productivity statistics»
This research adopts the Cobb-Douglas production function for the reason that it meets with certainty the regularity conditions of a production function and that, restrictive, the assumptions underlying it may hold more if the factors of production (ATMs, labor and physical capital) are combined in the same production process
The results show that the empirical effects of the use of automated teller machines (ATMs) on the level of production of banks in the Union are in line with the anticipated theoretical effects that logically led the same banks to adopt and use this technology in their business according to the theoretical analysis of Venkatesh et al Empirically, this result of the positive and significant effect of ATMs on the level of output of banks in the WAEMU is similar to that found by Martín-Oliver and Salas-Fumás (2008)
Summary
In the New York Times book review in 1987, Robert Solow said, « You can see the computer age everywhere but in the productivity statistics». In the banking sector in particular, some empirical analyzes confirm Solow’s paradox (Akhisar et al, 2015; Beccalli, 2007; Ho and Mallick, 2010) while others refute it (Mehmood et al, 2015; and Ogunyomi and Obi, 2016). The consequence of these results, which are controversial in the literature, is that the issue of the existence of ICT effects on banking performance in general remains topical. This issue still needs to be addressed in light of the increasing use of ICT by banks in their business, despite the controversy over their empirical effects on banking performance
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