nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2016‒08‒21
eight papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Blockchain Technology and Cryptocurrencies: Opportunities for Postal Financial Services By Christian Jaag; Christian Bach
  2. The Role of ICT in Reducing Information Asymmetry for Financial Access By Asongu, Simplice; Moulin, Bertrand
  3. Mobile Phones in the Diffusion of Knowledge and Persistence in Inclusive Human Development in Sub-Saharan Africa By Asongu, Simplice; Nwachukwu, Jacinta
  4. The Mobile Phone in the Diffusion of Knowledge for Institutional Quality in Sub-Saharan Africa By Asongu, Simplice; Nwachukwu, Jacinta
  5. The Role of Governance in Mobile Phones for Inclusive Human Development in Sub-Saharan Africa By Asongu, Simplice A; Nwachukwu, Jacinta
  6. Competition in the Fixed Telecommunication Market Segment: Challenges and Theories By Ben Dkhil, Inès
  7. Infrastructure and poverty in Sub-Saharan Africa: A review By Peters, Jörg
  8. Can Volume Predict Bitcoin Returns and Volatility? A Nonparametric Causality-in-Quantiles Approach By Mehmet Balcilar; Elie Bouri; Rangan Gupta; David Roubaud

  1. By: Christian Jaag; Christian Bach
    Abstract: This paper explores opportunities arising from blockchain technology for postal operators. Blockchain technology has lately received a lot of interest by the media and the industry, especially in financial services. In the past years an entire ecosystem of new companies has developed, offering hundreds of different blockchain applications. Blockchains are a new kind of decentralized, secure and fast means of record-keeping. The first application of blockchain technology are cryptocurrencies like Bitcoin, which have become an alternative to commodity money and fiat money, but postal operators may be able to exploit this technology in a number of different ways.
    Keywords: Postal Sector, Cryptocurrencies, Bitcoin, Financial Services, Financial Inclusion
    JEL: L43 L51
    Date: 2016–04
  2. By: Asongu, Simplice; Moulin, Bertrand
    Abstract: This study assesses the role of ICT in complementing private credit bureaus (PCB) and public credit registries (PCR) in reducing information asymmetry for financial access. The empirical evidence is based on Generalised Method of Moments with 53 African countries for the period 2004-2011. The following findings are established. First on financial access: (i) the marginal effects from interactions between ICT and PCR (PCB) are consistently positive (negative); (ii) net effects from interactions are negative with the higher magnitude from PCR and (iii) only thresholds corresponding to interactions between PCR and internet penetration are within range. Second, findings on financial allocation efficiency reveal positive marginal and net effects exclusively for mobile phones and PCR. Third, allocation efficiency may be constrained by increasing financial deposits. Overall, the complementarity between information offices and ICT in boosting financial access is still very limited. Policy implications are discussed with emphasis on improving the engaged complementarity and fighting surplus liquidity.
    Keywords: Financial access; Information asymmetry; ICT
    JEL: G20 G29 L96 O40 O55
    Date: 2016–01
  3. By: Asongu, Simplice; Nwachukwu, Jacinta
    Abstract: The success of inclusive development strategies in the post-2015 sustainable development agenda depends substantially on the adoption of common inclusive development policies among nations. Building on the relevance of a knowledge economy in the post-2015 development agenda, this study models the feasibility of common policies for inclusive human development in Sub-Saharan Africa (SSA). More specifically, we investigate the complementary role of knowledge diffusion in the inclusive benefits of mobile phone penetration in SSA from 2000 to 2012 by employing the Generalised Method of Moments. Knowledge diffusion variables include educational quality, innovation and internet penetration. The main finding is that inclusive human development is persistently conditional on mobile phones in knowledge diffusion. Moreover, countries with low levels of inclusive human development are catching-up their counterparts with higher development. Policy implications are discussed with particular emphasis on how to leverage common knowledge economy initiatives for inclusive development.
    Keywords: Mobile phones; catch-up; inclusive human development; Africa
    JEL: G20 I10 I32 O40 O55
    Date: 2016–03
  4. By: Asongu, Simplice; Nwachukwu, Jacinta
    Abstract: This study assesses the mobile phone in the diffusion of knowledge for better governance in sub-Saharan Africa for the period 2000-2012. For this purpose we employ Generalised Method of Moments with forward orthogonal deviations. The empirical evidence is based on three complementary knowledge diffusion variables (innovation, internet penetration and educational quality) and ten governance indicators that are bundled and unbundled. The following are the main findings. First, there is an unconditional positive effect of mobile phone penetration on good governance. Second, the net effects on political, economic and institutional governances that are associated with the interaction of the mobile phone with knowledge diffusion variables are positive for the most part. Third, countries with low levels of governance are catching-up their counterparts with higher levels of governance. The above findings are broadly consistent with theoretical underpinnings on the relevance of mobile phones in mitigating bad governance in Africa. The evidence of some insignificant net effects and decreasing marginal impacts may be an indication that the mobile phone could also be employed to decrease government quality. Overall, this study has established net positive effects for the most part. Five rationales could elicit the positive net effects on good governance from the interaction between mobile phones and knowledge diffusion, among others, the knowledge variables enhance: reach, access, adoption, cost-effectiveness and interaction. In a nut shell, the positive net effects are apparent because the knowledge diffusion variables complement mobile phones in reducing information asymmetry and monopoly that create conducive conditions for bad governance. The contribution of the findings to existing theories and justifications of the underlying positive net effects are discussed.
    Keywords: Mobile phones; Governance; Africa
    JEL: G20 O38 O40 O55 P37
    Date: 2016–03
  5. By: Asongu, Simplice A; Nwachukwu, Jacinta
    Abstract: This study assesses the synergy effects of governance in mobile phone penetration for inclusive human development in Sub-Saharan Africa with data for the period 2000-2012 by employing a battery of interactive estimation techniques, namely: Fixed effects (FE), Generalised Method of Moments (GMM) and Tobit regressions. Concepts of political (voice & accountability and political stability/no violence), economic (government effectiveness and regulation quality) and institutional (corruption-control and rule of law) governance are employed. The following findings are established. First, the previously apparent positive correlation between mobile phones and inclusive development can be extended to a positive effect. Second, whereas political governance is overwhelmingly not significant across estimated models, average effects from economic governance are higher relative to institutional governance. Third, on the synergy effects from interactions between mobile phones and governance variables, whereas none are apparent in FE regressions, there are significant synergy effects in GMM and Tobit estimations, notably, from: (i) regulation quality in the former and (ii) political stability, voice & accountability and rule of law in the latter. Fourth, there is consistent evidence of convergence in inclusive human development. Policy implications are discussed.
    Keywords: Mobile phones; governance; inclusive human development
    JEL: G20 I10 I32 O40 P37
    Date: 2016–01
  6. By: Ben Dkhil, Inès
    Abstract: The persistence of the market power in the fixed telecommunication markets in both developed and developing economies is due to the technical and economic features of this industry. This paper provides an overview of these characteristics and changes. It also suggests a comparative critical survey of the access pricing theories that are “the key” to the transition to the competition in the fixed telecommunication segment. Through this overview, we aim to underline among that the central role that the regulation should play to ensure the establishment of sustainable competition in the fixed telecommunication markets.
    Keywords: Essential facilities, bottleneck, local loop, network externalities, economies of scale and scope, sunk costs, the marginal rule, the margin rule, the Ramsey pricing, the Price Caps policy.
    JEL: L43 L51
    Date: 2014–12–22
  7. By: Peters, Jörg
    Abstract: This paper reviews the book 'Infrastructure and Poverty in Sub-Saharan Africa' by Antonio Estache and Quentin Wodon. The authors summarize the political debate on infrastructure policy in Africa in a very compelling and knowledgeable way and make a convincing case for pro-poor subsidies. Yet, this review points out two reservations: The evidence on the welfare enhancing benefits of infrastructure investments is less conclusive than suggested in the book. The book also misses out on the recent technological developments that enable the provision of decentralized services, which might render classical network based infrastructure partly redundant in the future.
    Keywords: electrification,road infrastructure,water and sanitation
    JEL: H54 O13 O18 L91 L95 L96
    Date: 2016
  8. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University and Department of Economics, University of Pretoria); Elie Bouri (USEK Business School, Holy Spirit University of Kaslik, Labanon); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria); David Roubaud (Montpellier Business School, Montpellier, France)
    Abstract: The objective of this paper is to employ the recently proposed nonparametric causality-in-quantiles test to analyse the predictability of returns and volatility of Bitcoin over the daily period of 19th December, 2011 to 25th April, 2016, based on information provided by traded volume. The causality-in-quantile approach allows us to test for not only causality-in-mean, but also causality that may exist in the tails of the joint distribution of the variables. In addition, we are also able to investigate causality-in-variance (volatility spillovers) when causality in the conditional-mean may not exist, yet higher order interdependencies might emerge. We motivate our analysis by employing tests for nonlinearity. These tests detect nonlinearity, as well as the existence of structural breaks in the Bitcoin returns, and in its relationship with volume, implying that the Granger causality tests based on a linear framework is likely to suffer from misspecification. Unlike the result of no predictability obtained under the misspecified linear set-up, our nonparametric causality-in-quantiles test indicated that volume predicts returns over the quantile range of 0.25 to 0.75, i.e., barring in the bear and bull regimes of the Bitcoin market. However, we could not detect any evidence of predictability emanating from volume for the volatility of Bitcoin returns at any point of the conditional distribution. Our results highlight the importance of our detecting and modeling nonlinearity when analyzing causal relationships between volume and return in the Bitcoin market.
    Keywords: Bitcoin, Volume, Returns, Volatility, Quantile Causality
    JEL: C22 G15
    Date: 2016–08

This nep-pay issue is ©2016 by Bernardo Bátiz-Lazo. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.