Technology is changing lending: Implications for research
Name
SSRN-id3695597.pdf
Description
Accepted version
Size
999.03 KB
Format
Adobe PDF
Checksum (MD5)
06517f1db754579f4e3dd429282543b0
Author(s)
Sutherland, Andrew Gordon
Date Issued
November 2020
Journal
Journal of Accounting and Economics
Publisher
Elsevier BV
Citation
Sutherland, Andrew G. “Technology is changing lending: Implications for research.” Journal of Accounting and Economics, 70, 2-3 (November-December 2020): 101361 © 2020 The Author
Version
Author's final manuscript
Abstract
Costello, Down, and Mehta (2020) trace their slider intervention to deviations from the credit line amount recommended by a credit scoring model. The deviations are followed by larger delinquency declines and bigger sales orders, and Costello et al. interpret these results using discretion-based theories. However, incremental deviations are concentrated on newer clients rather than those the lender has accumulated soft information about. Deviations also appear larger for public than private borrowers. My discussion evaluates whether these results align with discretion-based theories, and explores alternative interpretations based on salience and unique aspects of the trade credit setting. Differences in interpretation aside, the evidence is informative about technological advances in commercial lending. I conclude with an overview of several recent advances and discuss the implications for lending research.
MIT Department
Sloan School of Management
Terms of Use
Creative Commons Attribution-NonCommercial-NoDerivs License
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DOI of Published Version
https://doi.org/10.1016/J.JACCECO.2020.101361
