Market Structure and New Technology : Case from the Loan Markets in the EU

The aim of this paper is to investigate whether the market structure and new technology have an impact on bank loan markets in the European Union. The impact of new technology on three types of bank loans (residential mortgage loans, consumer loans, and corporate loans) is quantified separately at the bank level, using the single-equation panel regression model. Using a panel data sample for the period 2004–2019, we find that new technology mainly affects the growth of loans for households, particularly for consumer loans. We also find some heterogeneities between advanced and transitioning European Union banking sectors. Furthermore, the impact of new technology is significantly stronger and prolonged for foreign banks. Finally, our findings confirm the leading role of loans for households in the use of new digital technologies