nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2017‒07‒02
eighteen papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Promoting social innovation in rural areas through living labs By Tirziu, Andreea-Maria
  2. Measuring consumer expenditures with payment diaries By Schuh, Scott
  3. Living labs – instruments of social innovation in rural areas By Tirziu, Andreea-Maria; Vrabie, Catalin
  4. Evaluating Investments in Portability and Interoperability between Software Service Platforms By Netsanet Haile; Jörn Altmann
  5. Evaluating Market Consolidation in Mobile Communications By Christos Genakos; Tommaso Valletti; Frank Verboven
  6. Network Formation and Disruption - An Experiment - Are Efficient Networks too Complex? By Sonja Brangewitz; Behnud Mir Djawadi; Angelika Endres; Britta Hoyer
  7. From Qualitative to Digital: A Policy of Digital Translation in Qualitative Research By Orlova, Galina
  8. Online Exports and the Wage Gap By Cruz, Marcio; Milet, Emmanuel; Olarreaga, Marcelo
  9. How is technology changing the World landscape? A view over the European continent By Vrabie, Catalin; Tirziu, Andreea-Maria
  10. Targeted Debt Relief and the Origins of Financial Distress: Experimental Evidence from Distressed Credit Card Borrowers By Will Dobbie; Jae Song
  11. Bitcoin and Global Financial Stress: A Copula-Based Approach to Dependence and Causality-in-Quantiles By Elie Bouri; Rangan Gupta; Chi Keung Marco Lau; David Roubaud; Shixuan Wang
  12. An Index of Regulatory Practices for Financial Inclusion in Latin America By Lucia Pacheco; Liliana Rojas-Suarez
  13. The Risks of Nuclear Disaster and Its Impact on Housing Prices By Ando, Michihito; Dahlberg, Matz; Engström, Gustav
  14. Finance Behind the Veil of Money: Response to Dr. Braun’s Comment By Howden, David
  15. Identification of Credit Risk Based on Cluster Analysis of Account Behaviours By Maha Bakoben; Tony Bellotti; Niall Adams
  16. The Role of Coins in the Development of the Economy of Ancient Greece VI-IV Centuries B.C. By Zakharov, Evgeny
  17. Die Zukunft des Geldes - das Geld der Zukunft By Hungerland, Fabian; Quitzau, Jörn; Rotterdam, Jens; Hüning, Hendrik; Vöpel, Henning; Wolf, André
  18. Deutschlands Hochburgen der Digitalisierung By Berger, Sarah; Koppel, Oliver; Röben, Enno

  1. By: Tirziu, Andreea-Maria
    Abstract: In Romania, nearly half the population lives in rural areas, therefore it is difficult to associate concepts like smart cities and Internet of Things to the local government’s priority list. Nonetheless, recently there have been various initiatives to increase access to information using ICT methods in the rural communities as well. The purpose of this paper is not to exhaustively measure the already adopted means, but simply to provide a series of items considered barriers to ICT projects meant to contribute to these communities’ development. By researching the studies conducted so far (in Romania, there are about 2700 communes, these being the lowest administrative units), it was observed that the digital divide is found in 100% of these areas. At the urban level, mainly in the big cities, pilot projects for developing digital literacy among the senior population had a relatively high success. This type of programs has been initiated at the level of the communes with higher living standards, generally the ones located near large cities. Their success, though surely less visible than in the cities, is notable. The majority of these programs have the educational and health fields as targets. This article aims to show these programs’ implementation degree in Romania, providing as examples the most successful cases that help the social innovation process. The intention is to generate a list of objectives that the initiators of these programs have to take into consideration during the programs’ preparatory process.
    Keywords: social innovation, rural areas’ development, living labs
    JEL: O35
    Date: 2017–06–15
  2. By: Schuh, Scott (Federal Reserve Bank of Boston)
    Abstract: As the 2012 Diary of Consumer Payment Choice (DCPC) illustrates, there are advantages to measuring consumer expenditures by tracking the authorization of payments by instrument type (cash, check, debit or credit card, etc.). The main advantages of payment diaries appear to be the following: 1) the ability to measure expenditures by payment instrument aggregated into lumpy purchases (“shopping baskets”), 2) relatively low respondent burden, and 3) effective random sampling. Three notable results emerge from comparing the 2012 DCPC estimates with estimates from other reputable estimates of the current value of consumer expenditures: 1) DCPC payments estimates are 75 percent higher than Consumer Expenditure Survey estimates; 2) DCPC consumption estimates are 17 percent higher than personal consumption expenditures estimates in comparable expenditure categories (about half of the categories are comparable); and 3) DCPC payments roughly equal comparably adjusted national income and product accounts disposable income.
    Keywords: payments; consumer expenditures; consumption; income; diary survey
    JEL: D12 D14 E21
    Date: 2017–01–20
  3. By: Tirziu, Andreea-Maria; Vrabie, Catalin
    Abstract: In a country where nearly half the population lives in rural areas, it is difficult to link concepts such as smart cities, Internet of Things to the local government’s priority list. However, lately there have been numerous initiatives to improve access to information using ICT in the rural communities as well. The purpose of this article is not to exhaustively measure the already adopted means, but merely to provide a series of items retrieved as barriers to ICT projects meant to develop these communities. Following the studies conducted so far (in Romania there are about 2,700 communes – the lowest administrative entities of our country), it was observed that the digital divide is found in 100% of these areas. At the urban level – especially in the big cities, pilot projects for developing digital literacy among the elder population had a relatively high success. Such programs have been initiated at the level of the communes whose living standard is higher (the ones that are located near large cities). Their successes, though certainly less visible than in the urban communities, are noteworthy. Most such programs have targeted educational and health fields. The article we propose aims to show these programs’ implementation degree in Romania, providing as examples the most successful cases that help the social innovation process. The intention with which we start this study is to create a list of objectives that the initiators of these programs have to take into account during the preparation of those programs.
    Keywords: living labs, social innovation, rural areas
    JEL: O35
    Date: 2017–05–04
  4. By: Netsanet Haile (Seoul National University, Seoul, Korea); Jörn Altmann (Seoul National University, Seoul, Korea)
    Abstract: Within a closed ecosystem, end-users cannot interoperate with other platforms or port their software and data easily without a cost for interface integration or data re-formatting. The customers of these closed software service platforms are locked-in. Potential customers, who are aware of this lock-in issue, are hesitant to adopt a closed software service platform, slowing down the wide deployment of the software service platform. This paper applies an economic perspective to investigate the value creation for providers and users at different levels of interoperability. For the analysis, a value creation model for software service platforms within a software service ecosystem has been developed. Simulations of the value creation model show that, even if investments in interoperability and portability are aimed at addressing user requirements, their impact also drives the providers’ profitability. Furthermore, emerging providers require investing more than market leading providers, as they have less power to set de facto standards. The simulation results also show that there is an optimal level of investments, with respect to profit and return on investments. Overall, from these results, platform providers cannot only obtain an understanding on how investments in interoperability and portability impact cost, enable cost-effective service integration, and create value, but also design new strategies for optimizing investments.
    Keywords: Cloud Computing, Software Service Platform, Interoperability, Portability, Value Creation Model, Computational Economics, Simulation, Value Analysis, Net Present Value, Return On Investments, Investment Assessment.
    JEL: C15 D24 D46 D85 E22 L86 O31
    Date: 2017–05
  5. By: Christos Genakos; Tommaso Valletti; Frank Verboven
    Abstract: We study the dual relationship between market structure and prices and between market structure and investment in mobile telecommunications. Using a uniquely constructed panel of mobile operators' prices and accounting information across 33 OECD countries between 2002 and 2014, we document that more concentrated markets lead to higher end user prices. Furthermore, they also lead to higher investment per mobile operator, though the impact on total investment is not conclusive. Our findings are not only relevant for the current consolidation wave in the telecommunications industry. More generally, they stress that competition and regulatory authorities should take seriously the potential trade-off between market power effects and efficiency gains stemming from agreements between firms.
    Keywords: mobile telecommunications, market structure, prices, investments, mergers
    JEL: K20 L10 L40 L96
    Date: 2017–06
  6. By: Sonja Brangewitz (Paderborn University); Behnud Mir Djawadi (Paderborn University); Angelika Endres (Paderborn University); Britta Hoyer (Paderborn University)
    Abstract: We experimentally study the emergence of networks under a known external threat. To be more specific, we deal with the question if subjects in the role of a strategic Designer are able to form safe and efficient networks while facing a strategic Adversary who is going to attack their networks. This investigation relates theoretical predictions by Dziubinski and Goyal (2013) to actual observed behaviour. Varying the costs for protecting nodes, we designed and tested two treatments with different predictions for the equilibrium network. Furthermore, the influence of the subjects' farsightedness on their decision-making process was elicited and analysed. We find that while subjects are able to build safe networks in both treatments, equilibrium networks are only built in one of the two treatments. In the other treatment, predominantly safe networks are built but they are not efficient. Additionally, we find that farsightedness -as measured in our experiment- has no influence on whether subjects are able to build safe or efficient networks.
    Keywords: Networks Experiment, Network Design, Network Defence, Network Disruption
    JEL: D03 D85 C91
    Date: 2017–06
  7. By: Orlova, Galina (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The paper considers the opportunities, challenges and prospects of digitalization in qualitative social studies, whose representatives traditionally express skepticism and distrust regarding the use of digital technologies. Considering digital translation, the author believes that the reflexive mastering of technologies, contrary to the most terrible expectations, strengthens the positions of qualitative analytics, and does not weaken them. Using the example of developing a specialized software CAQDAS, creating a hypermedia environment for ethnography and epistemological experiments with qualitative data in the Obninsk digital project, various ways of going digital staying qualitative are described.
    Date: 2017–05
  8. By: Cruz, Marcio; Milet, Emmanuel; Olarreaga, Marcelo
    Abstract: The development of the internet is often seen as a source of demand for skilled workers and therefore a potential driver of the wage gap between skilled and unskilled workers. In this paper we focus on the impact that international trade in online platforms has on the wage gap. Because online trade allows smaller firms with relatively more unskilled workers to access world markets we can a priori expect that an expansion of online exports reduces the wage gap. After correcting for potential endogeneity bias in a sample of twenty three developing countries for which we can match online trade and wage gap data, we find that a 1 percent increase in the share of online exports over GDP leads to a 0.01 percent decline in the wage gap.
    Keywords: online trade; wage gap
    JEL: F14 J31 L86
    Date: 2017–06
  9. By: Vrabie, Catalin; Tirziu, Andreea-Maria
    Abstract: We are used to look at geographical, economic, political or even religious maps of our planet. Cybernetics, which is a relatively new science that forcedly makes its way through already existing sciences, it’s creating its own map. Obviously, despite the young age, its complexity does not permit detailing of each component. This article focuses on the digital divide on the European continent. Starting from an analysis on local communities in Romania from 2010 up till now, the intention to extend the study to the entire region and then to the whole continent did not take long to appear, but unfortunately the complexity and lack of resources are proving to be a great barrier. In spite of this, we analysed at a national level (using a series of criteria proposed by the ECDL Foundation, together with those proposed by UNESCO and adapted according to the literature studied) all European countries, which possess as we know, important similarities and differences related to their political, social, and economic contexts. As a result we created a map of the level of information technology's adoption amongst population. The research question this study investigates is how contextual features serve to influence the adoption of technology among different countries in Europe – focusing in particular at Romania. Due to the fact that high dispersion of results for indicators within the same country raises many questions, we conclude saying that the success of IT&C projects is to a large extent contingent upon political and economic contexts, while being less related to social contexts. The article also wants to be a scientific debates initiator, whose purpose is to present, in a formal framework: university courses, conferences, seminars, solutions and strategies of increasing the value of the indicators in question
    Keywords: technology, world landscape, Europe
    JEL: O33
    Date: 2017–05–04
  10. By: Will Dobbie; Jae Song
    Abstract: We study the drivers of financial distress using a large-scale field experiment that offered randomly selected borrowers a combination of (i) immediate payment reductions to target short-run liquidity constraints and (ii) delayed debt write-downs to target long-run debt constraints. We identify the separate effects of the payment reductions and debt write-downs using variation from both the experiment and cross-sectional differences in treatment intensity. We find that the debt write-downs significantly improved both financial and labor market outcomes despite not taking effect for three to five years. In sharp contrast, there were no positive effects of the more immediate payment reductions. These results run counter to the widespread view that financial distress is largely the result of short-run constraints.
    JEL: D14 J22 J31 K35
    Date: 2017–06
  11. By: Elie Bouri (USEK Business School, Holy Spirit University of Kaslik, Jounieh, Lebanon); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Chi Keung Marco Lau (Newcastle Business School, Northumbria University, Newcastle, UK); David Roubaud (Energy and Sustainable Development (ESD), Montpellier Business School, Montpellier, France); Shixuan Wang (Cardiff Business School, Cardiff University, CF10 3EU, United Kingdom)
    Abstract: We apply different techniques and uncover the quantile conditional dependence between the global financial stress index and Bitcoin returns from March 18, 2011, to October 7, 2016. The results from the copula-based dependence show evidence of right-tail dependence between the global financial stress index and Bitcoin returns. We focus on the conditional quantile dependence and indicate that the global financial stress index strongly Granger-causes Bitcoin returns at the left and middle tail of the distribution of the Bitcoin returns, conditional on the global financial stress index. Finally, we use a bivariate cross-quantilogram approach and show only limited directional predictability from the global financial stress index to Bitcoin returns in the medium term, for which Bitcoin can act as a safe haven against global financial stress.
    Keywords: Bitcoin; global financial stress index; dependence; copula; quantiles
    JEL: C22 G15
    Date: 2017–06
  12. By: Lucia Pacheco; Liliana Rojas-Suarez
    Abstract: The index assesses and compares the quality of regulations that influence financial inclusion in 8 Latin American countries. It defines three categories of regulatory practices: the enablers, which determine the overall quality of the financial environment; the promoters, which deal with specific market frictions; and the preventers which create distortions and barriers.
    JEL: G21 G22 G23 I25 K21 N26 O10
    Date: 2017–06
  13. By: Ando, Michihito (National Institute of Population and Social Security Research); Dahlberg, Matz (Department of Economics); Engström, Gustav (The Beijer Institute of Ecological Economics)
    Abstract: Using a data set on housing sales transactions we explore the potential effect of the Fukushima disaster on housing prices in Sweden. In contrast to most earlier findings in other countries we do not find any disproportionate effect from the Fukushima disaster on housing prices in vicinity of nuclear power plants in Sweden.
    Keywords: Fukushima; Nuclear accident; housing price; difference-indifferences
    JEL: Q51 Q53 R21
    Date: 2017–02–10
  14. By: Howden, David
    Abstract: What is the relationship between opportunity cost, choice and action? In my review of Eduard Braun´s Finance Behind the Veil of Money (2014), I took exception with his view that opportunity costs are not only unnecessary, but even detrimental to understand decision making. The most substantial difference between our views comes from Braun´s treatment of the relationship between opportunity cost and choice.
    Keywords: opportunity cost
    JEL: A1 D0 D00
    Date: 2016
  15. By: Maha Bakoben; Tony Bellotti; Niall Adams
    Abstract: Assessment of risk levels for existing credit accounts is important to the implementation of bank policies and offering financial products. This paper uses cluster analysis of behaviour of credit card accounts to help assess credit risk level. Account behaviour is modelled parametrically and we then implement the behavioural cluster analysis using a recently proposed dissimilarity measure of statistical model parameters. The advantage of this new measure is the explicit exploitation of uncertainty associated with parameters estimated from statistical models. Interesting clusters of real credit card behaviours data are obtained, in addition to superior prediction and forecasting of account default based on the clustering outcomes.
    Date: 2017–05
  16. By: Zakharov, Evgeny (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The economy of ancient states is a complex and diverse phenomenon. One of its essential components is monetary circulation, which from a certain moment is formed by circulation of coins. In this paper we will talk about the initial pages of the history of the money circulation of the ancient world.
    Date: 2017–05
  17. By: Hungerland, Fabian; Quitzau, Jörn; Rotterdam, Jens; Hüning, Hendrik; Vöpel, Henning; Wolf, André
    Abstract: Der technische Fortschritt sorgt auch im Finanzsektor für einen grundlegenden Wandel. Aufgrund der vielfältigen technischen Möglichkeiten ist inzwischen sogar eine Wirtschaft ohne Bargeld vorstellbar. Die Diskussion darüber hat längst begonnen. Trotz aller technischen Alternativen sehen wir das Bargeld aber noch nicht vor dem Aus. Die hohe Popularität des Bargeldes - zumindest in Deutschland - zeigt, dass es sich im Wettbewerb der unterschiedlichen Bezahlsysteme bisher durchgesetzt hat. Als innovatives Bezahlsystem, das sich abseits der bestehenden Geld und Währungsstrukturen entwickelt, gelten Digital- bzw. Kryptowährungen wie der Bitcoin. Dieses "neue Geld" sorgt wegen der technischen Eigenschaften für Aufsehen, unter anderem wird es nicht zentral von einer Zentralbank, sondern dezentral von einem Netzwerk geschaffen. Besonders viel Aufmerksamkeit bekommt der Bitcoin aber wegen seiner beeindruckenden Wertentwicklung. Fintechs modernisieren die Finanzwirtschaft. Sie machen Banken zu schlankeren, plattformbasierten Technologieunternehmen, deren Kapital immer mehr auch aus Daten bestehen wird. Finanzwirtschaftliche Dienstleistungen werden hyperindividualisiert, d.h., sie werden immer stärker maßgeschneidert. Das wiederum wird neue regulatorische Fragen aufwerfen. Bargeld, Digitalwährungen, Fintechs - das sind die drei Schwerpunktthemen der vorliegenden Publikation. In Teil A greifen wir zu diesen Themenfeldern die tagesaktuellen Diskussionen auf, ordnen sie ein und wagen einige Prognosen. In Teil B gehen wir über den eher praktischen Ansatz hinaus, untersuchen die Themen grundsätzlicher und skizzieren die volkswirtschaftlichen und regulatorischen Herausforderungen.
    Date: 2017
  18. By: Berger, Sarah; Koppel, Oliver; Röben, Enno
    Abstract: Eine Big-Data-Analyse von Patentanmeldungen zeigt die Entstehungsorte deutscher Digitalisierungstechnologie. Leistungsstarke Cluster sind die süddeutschen Großstädte. Allein München bringt hierzulande jedes vierte Digitalisierungspatent hervor, mehr als jeder dritte Landkreis hingegen kein einziges. Nachholbedarf besteht noch in Ostdeutschland sowie im Nordwesten.
    Date: 2017

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