Abstract
This study examines the relationship between Information Technology investment and the profitability of Tunisian banks, via static and dynamic panel regression models. Our study focused on 15 Tunisian banks for 19 years (2001-2019). To assess the profitability of these banks, three measures were used: two traditional accounting ratios and net interest margin. Our research has shown the importance of the role played by IT in Tunisian banks since IT investments improve their profitability. This finding contradicts the “Productivity Paradox” that high IT investments are not associated with better performance. Indeed, Tunisian banks are acting on their size to boost their performance, and the more the banks take the risk by granting more loans, the more profitable they are by increasing their Return on Assets. Finally, public banks are more profitable than private banks when considering their net interest margin.
 JEL Classification Codes: B21, C58, G21, G32, O32.
Highlights
Today, in banks, different Information Technologies (IT) has become the key to the financial engineering process for organizations wishing to survive and continue to thrive in this rapidly changing financial environment
As part of this research, we examined the relationship between IT investment and the profitability of Tunisian banks, via static and dynamic panel regression models
Our research has shown the importance of the role played by IT in Tunisian banks since IT investments improve their profitability
Summary
In banks, different Information Technologies (IT) has become the key to the financial engineering process for organizations wishing to survive and continue to thrive in this rapidly changing financial environment. The advent of the Internet has revolutionized the world of communication, making it possible to optimize the strategy of globalization advocated by the contemporary vision of the business world. This technological revolution has led to the decompartmentalization of financial markets and necessary deregulation, which has profoundly transformed market structures and forms of competition (Hoque et al, 2020). IT is an essential tool that banks must manage and master to ensure their competitiveness This gives them a privileged place in the banking production process and raises permanent questions about the relevance of their strengthening and the methods of their optimization. A new conception of banking performance emerges and an appropriate performance evaluation system must be implemented
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