Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/33471
Title: To what extent are labor-saving technologies improving efficiency in the use of human resources? Evidence from the banking industry
Authors: Fung, MK 
Keywords: Banking
Efficiency
Human resources
Labor-saving technology
Issue Date: 2008
Publisher: Wiley-Blackwell
Source: Production and operations management, 2008, v. 17, no. 1, p. 75-92 How to cite?
Journal: Production and operations management 
Abstract: With special reference to the banking industry, the objective of this study is to address managerial concerns over the impact of labor-saving technologies on efficiency in the use of human resources. A bank is viewed as a collection of human, technology, and capital resources. Labor-saving technologies are represented by two categories of technology resources - information technologies and patented in-house process innovations. The estimation of a stochastic frontier manpower-requirement function shows that, whereas information technology resources have a direct impact on efficiency in the use of human resources, in-house process innovations have an indirect impact through spillovers. The reduction in labor costs resulting from a more efficient use of human resources is more than enough to cover the required increase in information technology expenditures. This cost-reducing impact is stronger for firms currently employing a lower level of information technologies. The empirical findings also suggest a complementary relationship between information technologies and spillovers of in-house process innovations. The empirical framework proposed in this study can help decision makers determine the optimal input mix of technology and human resources.
URI: http://hdl.handle.net/10397/33471
ISSN: 1059-1478
EISSN: 1937-5956
DOI: 10.3401/poms.1070.0003
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