nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2017‒06‒18
twenty papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Technology-driven information sharing and conditional financial development in Africa By Asongu, Simplice; Anyanwu, John; Tchamyou, Vanessa
  2. Comparative human development thresholds for absolute and relative pro-poor mobile banking in developing countries By Asongu, Simplice; Nwachukwu, Jacinta
  3. Recent finance advances in information technology for inclusive development: a survey By Asongu, Simplice; Nwachukwu, Jacinta
  4. "Internet and enterprise productivity: evidence from Latin America" By Juan Jung; Enrique López-Bazo; Matteo Grazzi
  5. Strengthening cooperation between telecommunications operators and national disaster offices in Caribbean countries By Williams, Robert Crane; Bissessar, Shiva
  6. The Digital Privacy Paradox: Small Money, Small Costs, Small Talk By Susan Athey; Christian Catalini; Catherine Tucker
  7. Efficient parcel delivery by deriving customers' key locations By PRAET, Stiene; MARTENS, David
  8. Digitalisierung für eine inklusive Bildung und Qualifizierung in der Arbeitswelt: Erfahrungen und Perspektiven aus der IAT-Forschung By David, Alexandra; Evans, Michaela; Hamburg, Ileana
  9. A Deep Causal Inference Approach to Measuring the Effects of Forming Group Loans in Online Non-profit Microfinance Platform By Thai T. Pham; Yuanyuan Shen
  10. What money does: An inquiry into the backbone of capitalist political economy By Koddenbrock, Kai
  11. Multiple lending, credit lines, and financial contagion By Giuseppe Cappelletti; Paolo Emilio Mistrulli
  12. Social ties and the demand for financial services By Eleonora Patacchini; Edoardo Rainone
  13. You’ve Got Email: a Workflow Management Extraction System By chaipornkaew, P.; Prexawanprasut, T.; McAleer, M.J.
  14. The Transmission Mechanism of Credit Support Policies in the Euro Area By Boeckx, Jef; De Sola Perea, Maite; Peersman, Gert
  15. Nonneutrality of Money in Dispersion: Hume Revisited By Jin, Gu; Zhu, Tao
  16. "On the regional impact of broadband on productivity: the case of Brazil" By Juan Jung; Enrique López-Bazo
  17. Money Follows the Person 2015 Annual Evaluation Report By Carol V. Irvin; Alex Bohl; Kate Stewart; Susan R. Williams; Allison Steiner; Noelle Denny-Brown; Andrea Wysocki; Rebecca Coughlin; Jason Smoot; Victoria Peebles
  18. A summary of a survey on proposed African monetary unions By Asongu, Simplice; Nwachukwu, Jacinta; Tchamyou, Vanessa
  19. Thoughts on the Normalization of Monetary Policy : a speech at the Economic Club of New York, New York, New York, June 1, 2017. By Powell, Jerome H.
  20. Conducting Clinical Research Using Crowdsourced Convenience Samples By Jesse Chandler; Danielle Shapiro

  1. By: Asongu, Simplice; Anyanwu, John; Tchamyou, Vanessa
    Abstract: Information technology is increasingly facilitating mechanisms by which information asymmetry between lenders and borrowers in the financial sector can be reduced in order to enhance financial access for human and economic development in developing countries. We examine conditional financial development from ICT-driven information sharing in 53 African countries for the period 2004-2011, using contemporary and non-contemporary quantile regressions. ICT is measured with mobile phone penetration and internet penetration whereas information sharing offices are public credit registries and private credit bureaus. The following findings are established. First, there are positive effects with positive thresholds from ICT-driven information sharing on financial depth (money supply and liquid liabilities) and financial activity (at banking and financial system levels). Second, for financial intermediation efficiency, the positive effects from mobile-driven information sharing are apparent exclusively in certain levels of financial efficiency. Third, with regard to financial size, mobile-driven information sharing is positive with a negative threshold, whereas, internet-driven information sharing is positive exclusively among countries in the bottom half of financial size. Positive thresholds are defined as decreasing negative or increasing positive estimated effects from information sharing offices and vice-versa for negative thresholds. Policy implications are discussed.
    Keywords: Information Sharing; Financial Development; Quantile regression
    JEL: C52 G20 G29 O16 O55
    Date: 2017–01
  2. By: Asongu, Simplice; Nwachukwu, Jacinta
    Abstract: We assess the correlations between mobile banking and inclusive development (poverty and inequality) in 93 developing countries for the year 2011. Mobile banking entails: ‘mobile phones used to pay bills’ and ‘mobile phones used to receive/send money’, while the modifying policy indicator is the human development index (HDI). The data is decomposed into seven sub-panels based on two fundamental characteristics, namely: regions (Latin America, Asia and Pacific, Central and Eastern Europe, and Middle East and North Africa) and income levels (upper middle income, lower middle income and low income). Our results show that at certain thresholds of the HDI, mobile banking is positively linked to inclusive development. The following specific findings are established. First, the increased use of mobile phones to pay bills is negatively correlated with: (i) poverty in lower-middle-income countries (LMIC), upper-middle-income countries (UMIC) and Latin American countries (LA), respectively at HDI thresholds of 0.725, 0.727 and 0.778 and; (ii) inequality in UMIC and LA with HDI thresholds of respectively 0.646 and 0.761. Second, the increased use of mobile phones to send/receive money is negatively correlated with: (i) poverty in LMIC, UMIC and Central and Eastern European countries (CEE) with corresponding HDI thresholds of 0.631, 0.750 and 0.750 and (ii) inequality in UMIC, CEE and LA at HDI thresholds of 0.665, 0.736 and 0.726 respectively. The findings are discussed in the light of current policy challenges in the transition from Millennium Development Goals to Sustainable Development Goals. We have exploited the only macroeconomic data on mobile banking currently available.
    Keywords: Mobile banking, quality of growth, poverty, inequality
    JEL: G20 I10 I20 I32 O40
    Date: 2017–01
  3. By: Asongu, Simplice; Nwachukwu, Jacinta
    Abstract: The overarching question tackled in this paper is: to what degree has financial development contributed to providing opportunities of human development for those on low-incomes and by what information technology mechanisms? We survey about 180 recently published papers to provide recent information technology advances in finance for inclusive development. Retained financial innovations are structured along three themes. They are: (i) the rural-urban divide, (ii) women empowerment and (iii) human capital in terms of skills and training. The financial instruments are articulated with case studies, innovations and investment strategies with particular emphasis, inter alia on: informal finance, microfinance, mobile banking, crowd funding, microinsurance, Islamic finance, remittances, Payment for Environmental Services (PES) and the Diaspora Investment in Agriculture (DIA) initiative.
    Keywords: Finance; Inclusive Growth; Economic Development
    JEL: G20 I10 I20 I30 O10
    Date: 2017–01
  4. By: Juan Jung (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.); Enrique López-Bazo (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.); Matteo Grazzi (Competitiveness, technology and innovation division - Inter-American Development Bank, 1300 New York Avenue, NW 20577 Washington DC, USA.)
    Abstract: This paper tests three hypotheses regarding the link between internet and firm productivity: i) internet adoption and use constitute a source of productivity growth for firms in Latin America, ii) the intensity of its use also matters, and iii) the link between the new technologies and productivity levels is not uniform over the whole productivity distribution. The evidence in this paper fills the gap of scarce and fragmented literature focused on Latin America, and is aligned with previous research for more developed regions which has generally recognized that Information and Communication Technologies (ICTs) have radically changed how modern business are conducted, benefitting firm performances through several channels, such as increasing the efficiency of internal processes, expanding market reach or increasing innovation. Our findings suggest that low-medium productive firms benefit more from an expansion in internet adoption and use, in comparison with the most productive ones. If this evidence is supposed to reflect long-term effects, then public policies oriented to massify internet adoption and promote internet use intensively will surely contribute to reduce inequalities of enterprise’s productivity levels, promoting a level playing field among Latin American firms, something especially relevant for the most unequal region of the world.
    Keywords: ICT, Internet, Productivity, firms, Latin America JEL classification:D22, O31, O33, O54.
    Date: 2017–05
  5. By: Williams, Robert Crane; Bissessar, Shiva
    Abstract: In Caribbean countries, modern telecommunications infrastructure is vulnerable to an array of natural disasters, as exemplified by the impacts of Tropical Storm Erika in Dominica, Hurricane Joaquin in the Bahamas, and Hurricane Earl in Belize. At the same time, telecommunications service —especially mobile telephony and data services— can provide invaluable support to disaster management efforts by facilitating communication, coordination, and intelligence collection during emergency situations. Thus, as a matter of public safety, ensuring the resilience of telecommunications infrastructure in the face of natural hazards is of national importance. One way this resilience can be enhanced is by strengthening the relationship between operators of telecommunications services and national disaster offices. This paper suggests numerous areas for engagement between these entities and recommends the development of more formalized frameworks for mutual support. Among other issues, it considers needs for improvements to information sharing practices, collaboration on public early warning systems, and the inclusion of telecommunications operators in disaster drilling exercises.
    Date: 2017–05
  6. By: Susan Athey; Christian Catalini; Catherine Tucker
    Abstract: 'Notice and Choice' has been a mainstay of policies designed to safeguard consumer privacy. This paper investigates distortions in consumer behavior when faced with notice and choice which may limit the ability of consumers to safeguard their privacy using field experiment data from the MIT digital currency experiment. There are three findings. First, the effect small incentives have on disclosure may explain the privacy paradox: Whereas people say they care about privacy, they are willing to relinquish private data quite easily when incentivized to do so. Second, small navigation costs have a tangible effect on how privacy-protective consumers' choices are, often in sharp contrast with individual stated preferences about privacy. Third, the introduction of irrelevant, but reassuring information about privacy protection makes consumers less likely to avoid surveillance, regardless of their stated preferences towards privacy.
    JEL: C93 D62 D8 K10 O3 O31 O38
    Date: 2017–06
  7. By: PRAET, Stiene; MARTENS, David
    Abstract: Mobile location data can be used to discover personally meaningful places, extract semantics and even predict future locations. The goal of this paper is to use GPS location data to define customers' frequent locations and their corresponding semantics (home or work) in order to support a delivery service provider in the planning of their deliveries. We propose an approach that starts by dening stay points, where a user stays for more than 10 minutes. These stay points are clustered into stay regions, making use of a density-based clustering algorithm with a radius of 100 meters and a minimum cluster size of 1. Thereafter, clusters are ranked based on the amount of visits and the total time spent, to obtain the user's most frequent places. Home place prediction is based on the idea that a user is most likely found at home during the night, from 0h to 5h. The work place is where a user is most likely found during weekdays from 9h to 17h. Finally, we introduce a baseline method for future location prediction, based on the counts per location for every hour of the week. A test set is used to evaluate our approach against three criteria: accuracy, usefulness and timeliness. The results indicate that our approach can detect and label the most frequently visited places (home and work) by using mobile location data. The detection rate for less frequent places is much lower. Recommendations for further research are given to improve results.
    Date: 2017–01
  8. By: David, Alexandra; Evans, Michaela; Hamburg, Ileana
    Abstract: Die Digitalisierung beschleunigt die Gesellschaft und befördert Wandel auf allen gesellschaftlichen Ebenen. Bislang konzentriert sich die öffentliche Debatte allerdings oft nur auf beschäftigungspolitische Risiken, die sich durch digitale Technik ergeben, dabei kann Digitalisierung auch eine Chance für Arbeit und Beschäftigung sein. Mit Hilfe innovativer digital gestützter Bildungsmaßnahmen wird inklusive Bildung und Teilhabe für Personengruppen mit multiplen Vermittlungshemmnissen im Zugang zur Arbeitswelt und in der Arbeitswelt möglich. Die Partizipation dieser Zielgruppen an der Arbeitswelt ist für das "Lokale und Regionale" von hoher Bedeutung. Digitale Lernplattformen, die auf Kollaboration, inklusive Entrepreneurship und problembasiertes Lernen abzielen, sind beispielhafte Instrumente. Das IAT sammelt seit über zehn Jahren Erfahrungen mit diesen Instrumenten in Leonardo da Vinci und Erasmus+ Projekten.
    Date: 2017
  9. By: Thai T. Pham; Yuanyuan Shen
    Abstract: Kiva is an online non-profit crowdsouring microfinance platform that raises funds for the poor in the third world. The borrowers on Kiva are small business owners and individuals in urgent need of money. To raise funds as fast as possible, they have the option to form groups and post loan requests in the name of their groups. While it is generally believed that group loans pose less risk for investors than individual loans do, we study whether this is the case in a philanthropic online marketplace. In particular, we measure the effect of group loans on funding time while controlling for the loan sizes and other factors. Because loan descriptions (in the form of texts) play an important role in lenders' decision process on Kiva, we make use of this information through deep learning in natural language processing. In this aspect, this is the first paper that uses one of the most advanced deep learning techniques to deal with unstructured data in a way that can take advantage of its superior prediction power to answer causal questions. We find that on average, forming group loans speeds up the funding time by about 3.3 days.
    Date: 2017–06
  10. By: Koddenbrock, Kai
    Abstract: The theory and critique of capitalism is back at the center of scholarly debate. With it comes a growing awareness of the analytical and political importance of money and money creation. Moving from the more systemic reflections of Karl Marx to more recent work on money theory by Geoffrey Ingham and in financial economics, the paper focuses on three of money's "deeds." As a social structure and process, it makes moneymaking through capital permeate all our societies. As a public-private partnership between the state, rentiers, banks, and taxpayers that has existed since the foundation of the Bank of England in 1694, it binds these actors together in shifting relations of dependence. In today's financial capitalism, what counts as money and how far moneyness stretches into the realms of financial innovation has been the core object of struggle in the public-private partnership of money. In conclusion, the paper discusses how contemporary money redistributes intra-socially and internationally.
    Keywords: capitalism,Bank of England,derivatives,inequality,banks,US dollar,Marx,Ingham
    Date: 2017
  11. By: Giuseppe Cappelletti (European Central Bank); Paolo Emilio Mistrulli (Bank of Italy)
    Abstract: Multiple lending has been widely investigated from both an empirical and a theoretical perspective. Nevertheless, the implications of multiple lending for the stability of the banking system still need to be understood. By lending to a common set of borrowers, banks are interconnected and then exposed to financial contagion phenomena, even if not directly. In this paper, we investigate a specific type of externality that originates from those borrowers that obtain liquidity from more than one bank. In this case, contagion may occur if a bank hit by a liquidity shock calls in some loans and borrowers then pay them back by drawing money from other banks. We show that, under certain circumstances that make other sources of liquidity unavailable or too costly, multiple lending might be responsible for a large liquidity shortage.
    Keywords: financial contagion, multiple lending, credit lines
    JEL: G21 G28
    Date: 2017–06
  12. By: Eleonora Patacchini (Cornell University); Edoardo Rainone (Bank of Italy)
    Abstract: This paper studies the importance of social interactions for the adoption of financial services among young adults. Specifically, we investigate whether, how, and why financial decisions among interacting agents are correlated. We exploit a unique dataset of friendship networks in the United States and a novel estimation strategy that accounts for possibly endogenous network formation. We find that not all social contacts are equally important: only long-lasting relationships influence financial decisions. Moreover, this peer influence exists only in cohesive social structures. This evidence is consistent with an important role of trust in financial decisions. When agents consider whether or not to adopt a financial instrument, they face a risk and may place greater value on information coming from agents they trust. These results can help explain the importance of face-to-face social contacts for financial decisions.
    Keywords: financial market participation, financial literacy, social interactions, trust, network formation, endogeneity, Bayesian estimation
    JEL: C11 C31 D1 D14 D81 D85 G11 M31
    Date: 2017–06
  13. By: chaipornkaew, P.; Prexawanprasut, T.; McAleer, M.J.
    Abstract: Email is one of the most powerful tools for communication. Many businesses use email as the main channel for communication, so it is possible that substantial data are included in email content. In order to help businesses grow faster, a workflow management system may be required. The data gathered from email content might be a robust source for a workflow management system. This research proposes an email extraction system to extract data from any incoming emails into suitable database fields. The database, which is created by the program, has been planned for the implementation of a workflow management system. The research is presented in three phases: (1) define suitable criteria to extract data; (2) implement a program to extract data, and store them in a database; and (3) implement a program for validating data in a database. Four criteria are applied for an email extraction system. The first criterion is to select contact information at the end of the email content; the second criterion is to select specified keywords, such as tel, email, and mobile; the third criterion is to select unique names, which start with a capital letter, such as the names of people, places, and corporates; the fourth criterion is to select special texts, such as Co. Ltd, .com, and www. The empirical results suggest that when all four criteria are considered, the accuracy of a program and percentage of blank fields are at an acceptable level compared with the results from other criteria. When four criteria are applied to extract 7,340 emails in English, the accuracy of this experiment is approximately 68.66%, while the percentage of blank fields in a database is approximately 68.05. The database created by the experiment can be applied in a workflow management system.
    Keywords: Business operations, startup business, import/export industry, email, business data, workflow management system, business transactions, migrating, email extraction system
    JEL: J24 O31 O32 O33
    Date: 2017–05–01
  14. By: Boeckx, Jef; De Sola Perea, Maite; Peersman, Gert
    Abstract: Using a sample of 131 banks, we Önd that the Eurosystemís credit support policies have been successful in stimulating bank credit to the private sector: the impact was greater on the loan supply of smaller, less liquid, less capitalized banks and those more dependent on wholesale funding. The role of bank capital is, however, ambiguous. Besides the above favorable direct e§ect on loan supply, lower levels of bank capitalization at the same time mitigate the size, retail and liquidity e§ects of these policies. The low capital drag on the other channels has even been dominant during the sample period.
    Date: 2017–06
  15. By: Jin, Gu; Zhu, Tao
    Abstract: For a class of standard and widely-used preferences, a one-shot money injection in a standard matching model can induce a significant and persistent output response by dispersing the distribution of wealth. Decentralized trade matters for both persistence and significance. In the presence of government bonds the injection has a liquidity effect and the inflation rate right following the injection may be below the steady-state rate level.
    Keywords: Nonneutrality, Money Injection, Phillips Curve, Nominal Rigidity
    JEL: E31 E40 E5 E50
    Date: 2017–06–05
  16. By: Juan Jung (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.); Enrique López-Bazo (AQR-IREA, Universitat de Barcelona, Av. Diagonal 690, 08034 Barcelona, Spain.)
    Abstract: This paper analyses the incidence of broadband on regional productivity in Brazil, intending to find out if the economic impact is uniform across all territories of the country. The possibility of performing a regional approach, instead of the usual country-level analysis, means an opportunity to disentangle the economic impact of broadband at territories which share a common institutional and regulatory framework as are the regions inside a country. Results suggest that the impact of broadband on productivity is positive although not uniform across regions. On the one hand, it seems to depend on connection quality and network effects. Faster download speed and critical-mass accounting for network externalities in the region enhance the economic impact of broadband. On the other hand, higher productivity gains are estimated for the less developed regions. The fact that the less productive regions in Brazil seem to be benefiting more from broadband may suggest that it can constitute a factor favoring regional convergence in the country.
    Keywords: Broadband, Information and Communication Technologies, Regional Productivity. JEL classification: O33, O47, R11.
    Date: 2017–05
  17. By: Carol V. Irvin; Alex Bohl; Kate Stewart; Susan R. Williams; Allison Steiner; Noelle Denny-Brown; Andrea Wysocki; Rebecca Coughlin; Jason Smoot; Victoria Peebles
    Abstract: This seventh annual report from the national evaluation of the Money Follows the Person rebalancing demonstration provides information about (1) the program; (2) how it grew and changed since transitions began in 2007; and (3) demonstration outcomes such as cost savings, transition rates, and quality of life.
    Keywords: Money Follows the Person (MFP), Medicaid, community transitions, long-term services and supports (LTSS), home- and community-based services (HCBS), disabilities, quality monitoring, rebalancing, transitions, intermediate care facilities, nursing homes
    JEL: I J
  18. By: Asongu, Simplice; Nwachukwu, Jacinta; Tchamyou, Vanessa
    Abstract: This review summarises a survey of about 70 empirical studies on proposed African monetary unions published during the past fifteen years. Four main strands are outlined in four tables. They include the: (i) West African Monetary Zone (WAMZ), (ii) East African Monetary Union (EAMU), (iii) Southern African Monetary Union (SAMU) and (iv) African Monetary Union (AMU). A number of concerns are apparent from the feasibility and/or desirability of potential monetary unions. They are variations in: empirical strategies, selection of variables, considered periodicities and sampled countries. The Hegelian dialectics are used to establish selective expansion as the predominant mode of monetary integration. Some studies make the case for strong institutions and pegs as alternatives to currency unions. The employment of cluster analysis, distinguishing shocks from responses in the examination of business cycle synchronisation and the disaggregation of panels into sub-samples provide more subtle policy implications.
    Keywords: Currency Area; Policy Coordination; Africa
    JEL: F15 F36 F42 O55 P52
    Date: 2017–03
  19. By: Powell, Jerome H. (Board of Governors of the Federal Reserve System (U.S.))
    Date: 2017–06–07
  20. By: Jesse Chandler; Danielle Shapiro
    Abstract: This article summarizes what is known about Amazon’s Mechanical Turk sample composition and data quality. It addresses methodological issues with using Mechanical Turk and suggests concrete steps to avoid these issues or minimize their impact.
    Keywords: Amazon Mechanical Turk, Internet research methods, convenience sample, crowdsourcing
    JEL: I

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