Academic Events

Topic:

Time&Date:

10:30 am - 12:00 pm, March 21, 2025 (Friday)

Venue

Room 102, Conference Complex Ⅱ

Speaker:

Jung Koo Kang 

Harvard Business School

We investigate whether the adoption of data-driven technologies reshapes the competitive dynamics within the small business lending market by reducing the information advantages traditionally held by local banks. To identify these information advantages, we utilize local newspaper closures as an information shock to capture the reduction of local information available to non-local banks. Consistent with a decrease in valuable local information reinforcing local banks' information advantages, we show that banks with higher local market concentration obtain a larger share of small business loans in their local counties following local newspaper closures. However, these information advantages gradually diminish over time after cloud platforms, a key data-driven technology infrastructure, are widely implemented. Using various proxies for data-driven technology adoption, we find consistent evidence that local banks' information advantages disappear in counties where they compete against banks making greater investments in these technologies; specifically, those expanding AI-related human capital investments, developing more AI patents, adopting web analytics technologies, or allocating larger budgets for data storage. We further support our results using banks’ proximity to AI research institutions as an instrument for AI-related human capital investments. Overall, these findings suggest that data-driven technologies can reduce local banks' private information advantages, leveling the playing field in lending markets.

Biography:

Jung Koo Kang is an assistant professor in the Accounting and Management Unit. He teaches the Financial Reporting and Control course in the MBA required curriculum.Professor Kang’s research areas are in financial technology and innovation, alternative data, debt contracting, and financial intermediation. Specifically, he studies how financial technologies and alternative data drive innovation in credit market, create value for business, and address important social problems. His research has been published in Journal of Accounting and Economics, Journal of Accounting Research, Journal of Financial Reporting and Review of Accounting Studies.

Professor Kang earned a Ph.D. in Accounting from the University of Southern California. He also holds a M.S. in Statistics from University of Minnesota, and a Bachelor of Business Administration from Korea University. Prior to his academic career, he spent seven years working as an auditor, credit rating analyst, and corporate banker. He is a CPA and CFA charterholder.