nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2017‒12‒18
23 papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. Copyright in the Blockchain Era: Promises and Challenges By Alexander Savelyev
  2. Bitcoin Awareness and Usage in Canada By Christopher S. Henry; Kim P. Huynh; Gradon Nicholls
  3. Potential Impact of Financial Innovation on Financial Services and Monetary Policy By Marek Dabrowski
  4. Increasing trust in the bank to enhance savings: Experimental evidence from India By Rahul Mehrotra; Vincent Somville; Lore vandewalle
  5. Regulatory Learning: how to supervise machine learning models? An application to credit scoring By Dominique Guegan; Bertrand Hassani
  6. U. S. consumer cash use, 2012 and 2015: an introduction to the Diary of Consumer Payment Choice By Greene, Claire; O'Brien, Shaun; Schuh, Scott
  7. Platforms to business relations in online platform ecosystems By Nestor Duch-Brown
  8. Improving financial access in Africa: insights from information sharing and financial sector development By Asongu, Simplice
  9. The role of enterprise modeling in digital transformation : an exploratory study By Hafsi Mouaad; Saïd Assar
  10. FinTech and Financial Inclusion in China By Kellee S. Tsai
  11. Digital platforms for facilitating access to research infrastructures By OECD
  12. Platform competition : who benefits from multihoming? By Belleflamme, Paul; Peitz, Martin
  13. High-Speed Broadband and Academic Achievement in Teenagers: Evidence from Sweden By Grenestam, Erik; Nordin, Martin
  14. Barriers to European cross-border E-commerce By Alex Coad; Nestor Duch-Brown
  15. Quality discrimination in online multi-sided markets By Nestor Duch-Brown
  16. Online Red Packets: A Large-scale Empirical Study of Gift Giving on WeChat By Yuan Yuan; Tracy Xiao Liu; Chenhao Tan; Jie Tang
  17. An ecosystem in the air? The instance of start-ups and the arrival of the LGV SEA in Bordeaux By Nathalie Gaussier; Claude Lacour
  18. Financial Literacy and Financial Behavior: Evidence from the Emerging Asian Middle Class By Antonia Grohmann
  19. Blockchain in Education By Alexander Grech; Anthony Camilleri
  20. Bitcoin Reveals Exchange Rate Manipulation and Detects Capital Controls By Gina Christelle Pieters
  21. Tweeting for Peace: Experimental Evidence from the 2016 Colombian Plebiscite By Jorge Gallego; Juan D. Martínez; Kevin Munger; Mateo Vásquez
  22. Congestion v Content Provision in Net Neutrality: The Case of Amazon's By José Francisco Tudón Maldonado
  23. Openness, ICT and Entrepreneurship in Sub-Saharan Africa By Asongu, Simplice; Nwachukwu, Jacinta

  1. By: Alexander Savelyev (National Research University Higher School of Economics)
    Abstract: The paper focuses on various legal-related aspects of the application of blockchain technologies in the copyright sphere. Specifically, it outlines the existing challenges for distribution of copyrighted works in the digital environment, how they can be solved with blockchain, and what associated issues need to be addressed in this regard. It is argued that blockchain can introduce long–awaited transparency in matters of copyright ownership chain; substantially mitigate risks of online piracy by enabling control over digital copy and creating a civilized market for “used” digital content. It also allows to combine the simplicity of application of creative commons/open source type of licenses with revenue streams, and thus facilitate fair compensation of authors by means of cryptocurrency payments and Smart contracts. However, these benefits do not come without a price: many new issues will need to be resolved to enable the potential of blockchain technologies. Among them are: where to store copyrighted content (on blockchain or “off-chain”) and the associated need to adjust the legal status of online intermediaries; how to find a right balance between immutable nature of blockchain records and the necessity to adjust them due to the very nature of copyright law, which assigns ownership based on a set of informal facts, not visible to the public. Blockchain as a kind of time stamping service cannot itself ensure the trustworthiness of facts, which originate “off-chain”. Much work needs to be done on the legal side: special provisions aimed at facilitating user’s trust in blockchain records and their good faith usage of copyrighted works based on them need to be introduced and transactions with cryptocurrencies have to be legalized as well as the status of Smart contracts and their legal consequences. Finally, the economics of blockchain copyright management systems need to be carefully considered in order to ensure that they will have necessary network effects. If those issues are resolved in a satisfactory way, blockchain has the potential to rewrite how the copyright industry functions and digital content is distributed
    Keywords: Z
    Date: 2017
  2. By: Christopher S. Henry; Kim P. Huynh; Gradon Nicholls
    Abstract: There has been tremendous discussion of Bitcoin, digital currencies and FinTech. However, there is limited empirical evidence of Bitcoin’s adoption and usage. We propose a methodology to collect a nationally representative sample using the Bitcoin Omnibus Survey (BTCOS) to track the ubiquity and usage of Bitcoin in Canada. We find that about 64 percent of Canadians have heard of Bitcoin, but only 2.9 percent own it. We also find that awareness of Bitcoin is strongly associated with men and those with college or university education: additionally, Bitcoin awareness is more concentrated among unemployed individuals. On the other hand, Bitcoin ownership is associated with younger age groups and a high-school education. Furthermore, we construct a test of Bitcoin characteristics to gauge the level of knowledge held by respondents who were aware of Bitcoin, including actual owners. We find that knowledge is positively correlated with Bitcoin adoption. We attempt to reconcile the difference in awareness and ownership by decomposing the transactional and store-of-value motives for holding Bitcoin. Finally, we conclude with some suggestions to improve future surveys on digital currency, in particular, to achieve precise estimates from the hard-to-reach population of digital currency users.
    Keywords: Bank notes, Digital currencies, Econometric and statistical methods
    JEL: E4 C12
    Date: 2017
  3. By: Marek Dabrowski
    Abstract: The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. It has already revolutionised financial services and, most likely, will continue to do so in the future. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009. However, financial innovation will not seriously affect the process of monetary policymaking and is unlikely to undermine the ability of central banks to perform their price stability mission. The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry’s business model in both its banking and non-banking components. It has already revolutionised financial services and, most likely, will continue to do so in the future. If not responded to adequately and timely by regulators, it may create new risks to financial stability, as occurred before the global financial crisis of 2007-2009. However, financial innovation will not seriously affect the process of monetary policymaking and is unlikely to undermine the ability of central banks to perform their price stability mission.
    Keywords: monetary policy, financial innovation, electronic money
    JEL: E41 E44 E51 E52 E58 G21
    Date: 2017–07
  4. By: Rahul Mehrotra; Vincent Somville; Lore vandewalle
    Abstract: Recent evidence highlights the importance of trust in explaining bank account savings. According to economic theory, repeated interactions can play a crucial role in shaping trust. We designed the first field experiment that tests whether increased interactions between clients and bankers influence a client's trust in bankers. We promoted interactions by randomly (i) opening accounts for the unbanked and (ii) making weekly payments on their accounts. At the end of these interventions, we measured trust by playing trust games between clients on the one hand, and their own local banker as well as an anonymous other banker on the other hand. The only intervention that has a signicant impact on the number of interactions is opening a bank account. It also greatly increases trust in the anonymous banker, but not in their own banker. Next, we investigate the importance of trust for account savings. We find a strong positive correlation between the clients' trust in their own banker and savings in the account, but their trust in another banker does not correlate with savings. From the decomposition of trust in its different determinants, we learn that expected trustworthiness matters most in explaining savings, while there is a minor role for social preferences and no role for risk attitudes. We conclude that the personalized client-banker relationships are crucial, but not malleable. Strategies which can deal with the expected trustworthiness - such as providing access to an ATM, or to a denser network of local bankers - might promote bank account savings.
    Keywords: India finance trust savings banking experiment rct
    Date: 2016
  5. By: Dominique Guegan (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Labex ReFi - Université Paris1 - Panthéon-Sorbonne); Bertrand Hassani (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Labex ReFi - Université Paris1 - Panthéon-Sorbonne)
    Abstract: The arrival of big data strategies is threatening the lastest trends in financial regulation related to the simplification of models and the enhancement of the comparability of approaches chosen by financial institutions. Indeed, the intrinsic dynamic philosophy of Big Data strategies is almost incompatible with the current legal and regulatory framework as illustrated in this paper. Besides, as presented in our application to credit scoring, the model selection may also evolve dynamically forcing both practitioners and regulators to develop libraries of models, strategies allowing to switch from one to the other as well as supervising approaches allowing financial institutions to innovate in a risk mitigated environment. The purpose of this paper is therefore to analyse the issues related to the Big Data environment and in particular to machine learning models highlighting the issues present in the current framework confronting the data flows, the model selection process and the necessity to generate appropriate outcomes.
    Keywords: Regulation,AUC,Machine Learning,Big Data,Credit Scoring
    Date: 2017–09
  6. By: Greene, Claire (Federal Reserve Bank of Boston); O'Brien, Shaun (Federal Reserve Bank of San Francisco); Schuh, Scott (Federal Reserve Bank of Boston)
    Abstract: U.S. consumer cash payments averaged 26 percent of all U.S. consumer payments by number (volume share) from 2008 to 2015, according to the Survey of Consumer Payment Choice (SCPC), and were essentially unchanged between 2012 and 2015. New estimates from the Diary of Consumer Payment Choice (DCPC) show that the volume share of consumer cash payments is higher than estimated in the SCPC and suggest that the cash volume share was 8 percentage points lower in 2015 than in 2012. The DCPC most likely does not provide an accurate estimate of the actual change in the cash volume share, however, due to changes in survey methodology. Counterfactual simulations controlling for survey and economic changes suggest the cash volume share declined approximately 2 to 5 percentage points due to changes in consumer preferences between 2012 and 2015.
    Keywords: Cash; money; payments; consumer behavior; Diary of Consumer Payment Choice; Survey of Consumer Payment Choice
    JEL: D12 D14 E42
    Date: 2017–10–25
  7. By: Nestor Duch-Brown (European Commission – JRC)
    Abstract: This report presents evidence on the relationship between online platforms and businesses using these platforms to reach consumers or conduct their operations. First, we review the literature on vertical relationships both from a classic approach and from a multi-sided market perspective. Second, we use survey data to explain the factors behind firms’ choice of online channel. Third, we explore the results of a survey passed to firms using platforms to understand their concerns about the behaviour of some of these online gatekeepers. Finally, we offer some conclusions.
    Keywords: digital single market, data economy, online platforms, multi-sided markets
    JEL: D23 K11 K12 L86
    Date: 2017–12
  8. By: Asongu, Simplice
    Abstract: The study investigates interactions between information sharing offices, the coexistence of financial sub-systems and financial access. The empirical evidence is based on Quantile regressions in order to articulate countries with low, intermediate and high levels of financial access. The scope of the study is on 53 African countries for the period 2004-2011. The following main results are established. First, the positive association between “information sharing offices (ISOs)” and “formal financial sector development” consistently increases with improvements in initial levels of credit access. Second, the negative linkage between ISOs and “informal financial sector development” consistently decreases with increasing levels of credit access. In summary, we establish that the positive complementarity of ISOs and financial formalization is an increasing function of financial activity (or access to credit) whereas the negative complementarity
    Keywords: Information Asymmetry; Financialization; Financial Access
    JEL: G20 G29 L96 O40 O55
    Date: 2017–07
  9. By: Hafsi Mouaad (DSI - Département Systèmes d'Information - TEM - Télécom Ecole de Management - Institut Mines-Télécom [Paris]); Saïd Assar (DSI - Département Systèmes d'Information - TEM - Télécom Ecole de Management - Institut Mines-Télécom [Paris], LITEM - Laboratoire en Innovation, Technologie, Economie et Management - UEVE - Université d'Évry-Val-d'Essonne - Grenoble École de Management (GEM) - TEM - Télécom Ecole de Management)
    Abstract: Digital transformation (DT) is a challenging issue for all companies and organizations whatever different is their business environments. DT is about business process, customer experience and business models; it relies on strong and lasting digital capabilities. Conducting DT projects in companies requires the evolution of existing information systems (IS). As Enterprise Modeling is an essential tool for managing the evolution of IS, we hypothesize that it can play an active role in guiding DT endeavors. The goal of this paper is to investigate this proposal through a case study conducted in a large financial firm. The study shows the essential role Enterprise Modeling plays in identifying the most important and relevant places to make changes in the IS in order to accommodate the ongoing DT in the company.
    Abstract: La transformation numérique est un enjeu incontournable qui se joue dans des environnements très différents et au travers de problématiques extrêmement variées pour les entreprises. En effet le numérique envahit la société et l'économie à un rythme accéléré, les canaux numérique se multiplient et leurs usages montent en puissance auprès des clients finaux, cela amène des bouleversements dans les modèles opérationnels, les modèles économiques avec parfois des impacts très importants sur toute la chaine de valeurs. De ce fait, les besoins d'évolutions partielles du système d'information sont fréquents et la gestion de la transformation numérique doit dorénavant être considérée comme une caractéristique permanente du système d'information. La transformation constante des métiers et des techniques en a complexifié la gestion. Dans cette optique, il est nécessaire de se doter de méthodes et d'outils formels spécifiquement adaptés aux différents métiers de l'entreprise et servant de support à l'ingénierie du système d'information. Dans ce cadre, cet article a pour but d'attirer l'attention sur le rôle de la modélisation d'entreprise (EM) en tant que support des prises de décision. L'objectif n'est pas de définir une méthodologie de pilotage de transformation numérique mais bien d'explorer le rôle de l'EM dans la conduite de la transformation numérique.
    Keywords: Digital transformation,Enterprise modeling,IS urbanization,Digital strategy,Enterprise strategy,Transformation numérique,Modélisation d'entreprise,Urbanisme SI,Stratégie numérique,Stratégie d'entreprise
    Date: 2017–05–17
  10. By: Kellee S. Tsai (Head, Department of Social Science , Hong Kong University of Science and Technology; Chair Professor, Division of Social Science, Hong Kong University of Science and Technology)
    Abstract: Professor Kellee Tsai, Faculty Associate at the Institute, offers insights on the Chinese government’s 2016-2020 plan to encourage digital technologies in order to promote financial inclusion and social stability. This brief examines the explosive growth of China’s fintech in response to demand for web-based services, and the government’s attempts to regulate this space.
    Keywords: Fintech, financial inclusion, china, entrepreneurship
    Date: 2017–11
  11. By: OECD
    Abstract: Shared research infrastructures are playing an increasingly important role in most scientific fields and represent a significant proportion of the total public investment in science. Many of these infrastructures have the potential to be used outside of their traditional scientific domain and outside of the academic community but this potential if often not fully realised. A major challenge for potential users (and for policy-makers) is simply identifying what infrastructures are available under what conditions. This report includes an analysis of 8 case studies of digital platforms that collate information and provide services to promote broader access to, and more effective use of, research infrastructures. Although there is considerable variety amongst the cases, a number of key issues are identified that can help guide policy-makers, funders, institutions and managers, who are interested in developing or contributing to such platforms.
    Date: 2017–12–08
  12. By: Belleflamme, Paul; Peitz, Martin
    Abstract: Competition between two-sided platforms is shaped by the possibility of multihoming. If users on both sides singlehome, each platform provides users on either side exclusive access to its users on the other side. In contrast, if users on one side can multihome, platforms exert monopoly power on that side and compete on the singlehoming side. This paper explores the allocative effects of such a change from single- to multihoming. Our results challenge the conventional wisdom, according to which the possibility of multihoming hurts the side that can multihome, while benefiting the other side. This is not always true: the opposite may happen or both sides may benefit.
    Keywords: Network effects , two-sided markets , platform competition , competitive bottle- neck , multihoming
    JEL: D43 L13 L86
    Date: 2017
  13. By: Grenestam, Erik (Department of Economics, Lund University); Nordin, Martin (AgriFood Economics Centre, Lund University)
    Abstract: This study examines the effects of super-fast internet connections on the academic achievement of students in upper secondary school. We link detailed register data on around 250,000 students to local levels of access to optic fiber broadband, in order to estimate a causal effect of broadband on student GPA. We show that reaching full coverage in the student’s parish of residence causes a GPA reduction ranging from 3 to 6 percent of a standard deviation. Estimates are consistently more negative for boys and students with low ability and/or low-educated parents. Using PISA survey data, we provide evidence that students living in areas with the greatest high-speed broadband expansion also spend more time online during weekdays, suggesting student time use as a potential mechanism.
    Keywords: Education; Broadband; Internet; High-school; GPA
    JEL: H52 I24 I28 J24 O33
    Date: 2017–12–13
  14. By: Alex Coad (European Commission – JRC); Nestor Duch-Brown (European Commission – JRC)
    Abstract: We analyse survey data to investigate the main barriers to European cross-border e-commerce. We investigate the determinants of selling online, as well as the frequency and determinants of cross-border e-commerce, and the role of barriers. Large firms, which are part of a group, are more likely to sell online. Firms generally make most of their online sales to their home country, although EU firms are more likely to engage in cross-border online trade with EU countries than non-EU countries. Firms report that they are facing a variety of barriers to e-commerce. Regulatory barriers are negatively associated with online sales. There is weak evidence that firms which use their own websites are more vulnerable to financial, market and information barriers. Firms that use a large platform experience fewer financial and market barriers. On the positive side, we find that small and young firms do not seem to be more vulnerable to barriers than large or more experienced firms.
    Keywords: digital single market, e-commerce, cross-border trade
    JEL: D23 K11 K12 L86
    Date: 2017–11
  15. By: Nestor Duch-Brown (European Commission – JRC)
    Abstract: The aim of this paper is to explain evidence of unfair practices by online platforms towards business users, particularly SME's. First, using survey data, we show that sellers operating with four different categories of platforms multi-home (marketplaces, app stores, social networks and online advertising). Hence, the appropriate competitive framework is the "competitive bottleneck" model. Second, we develop an empirical model of platform competition adding an additional dimension: service quality. The results indicate that the costs of providing quality to sellers are higher than the costs of providing quality to buyers. These differences may reflect different needs or preferences across groups. While buyers would require simple functionalities sellers would need more sophisticated services. When sellers' multi-home, platforms care more about buyers than sellers and while buyers will get an efficient level of quality, quality to sellers will be "degraded". We argue that this service quality degradation explain unfair trading practices simply because platforms are not willing to invest to take care of sellers.
    Keywords: digital single market, data economy, online platforms, multi-sided markets
    JEL: D23 K11 K12 L86
    Date: 2017–12
  16. By: Yuan Yuan; Tracy Xiao Liu; Chenhao Tan; Jie Tang
    Abstract: Gift giving is a ubiquitous social phenomenon, and red packets have been used as monetary gifts in Asian countries for thousands of years. In recent years, online red packets have become widespread in China through the WeChat platform. Exploiting a unique dataset consisting of 61 million group red packets and seven million users, we conduct a large-scale, data-driven study to understand the spread of red packets and the effect of red packets on group activity. We find that the cash flows between provinces are largely consistent with provincial GDP rankings, e.g., red packets are sent from users in the south to those in the north. By distinguishing spontaneous from reciprocal red packets, we reveal the behavioral patterns in sending red packets: males, seniors, and people with more in-group friends are more inclined to spontaneously send red packets, while red packets from females, youths, and people with less in-group friends are more reciprocal. Furthermore, we use propensity score matching to study the external effects of red packets on group dynamics. We show that red packets increase group participation and strengthen in-group relationships, which partly explain the benefits and motivations for sending red packets.
    Date: 2017–12
  17. By: Nathalie Gaussier; Claude Lacour
    Abstract: According to the economic, institutional and political agents, the arrival of the High Speed Line South Europe Atlantic LGV SEA in Bordeaux would trigger or boost a \"Bordeaux regional entrepreneurial ecosystem\". This present paper examines this concept of ecosystem and offers to show its main characteristics, stressing the part played by start-ups, and assessing the economic and spatial logics involved. In a first part, the point is to understand to what extend the start-ups that politicians claim to be the spear-heads of those ecosystems, would constitute new stakes of operating in ecosystems. The survey enables to re-examine the concepts of ecosystem and of entrepreneurial system, to place them into prospect in the frame of regional science and of models of regional development. In a second part, we highlight the characteristic elements of this bordelais ecosystem, using what we call its fundamental DNA: the bordelais entrepreneurial ecosystem is grounded on numerous start-ups whose nature as well as personal and spatial components put into question the emergence of new forms of organization and relationships with the major companies and research laboratories.
    Keywords: Ecosystem, start-up, entrepreneurial system, creative creation
    JEL: L26 M13 P00 R10 R58
    Date: 2017
  18. By: Antonia Grohmann
    Abstract: This paper analyses financial literacy and financial behavior of middle class people living an urban Asian economy. Other than most papers on financial literacy that focus on people in developed countries, we surveyed people living Bangkok. Using standard financial literacy questions, we find that financial literacy levels are largely comparable to industrialized countries, but understanding of more advanced financial concepts is lower. Similarly, savings accounts are held by most people, but more sophisticated products are a lot less common. We further show, in line with the literature, that higher financial literacy leads to improved financial decision making.
    Keywords: Financial literacy, Saving, Borrowing, Household finance
    JEL: D14 G11 D91
    Date: 2017
  19. By: Alexander Grech (StrategyWorks); Anthony Camilleri (StrategyWorks)
    Abstract: This report introduces the fundamental principles of the Blockchain focusing on its potential for the education sector. It explains how this technology may both disrupt institutional norms and empower learners. It proposes eight scenarios for the application of the Blockchain in an education context, based on the current state of technology development and deployment.
    Keywords: blockchain, blockchain in education, recognition of non-formal learning, formal learning accreditation, reputation systems, diploma supplement, digitisation of credentials, open education
    Date: 2017–11
  20. By: Gina Christelle Pieters
    Abstract: Many countries manipulate the value of their currency or use some form of capital control, yet the data usually used to detect these manipulations are low frequency, expensive, lagged, and potentially mismeasured. I demonstrate that the price data of the internationally traded cryptocurrency Bitcoin can approximate unocial exchange rates which, in turn, can be used to detect both the existence and the magnitude of the distortion caused by capital controls and exchange rate manipulations. However, I document that bitcoin exchange rates contain problematic bitcoin-market-speci c elements and must be adjusted before being used for this purpose. As bitcoin exchange rates exist at a daily frequency, they reveal transitory interventions that would otherwise go undetected. This result also serves as veri cation that Bitcoin is used to circumvent capital controls and manipulated exchange rates.
    JEL: F30 F31 E42 G15
    Date: 2017–11–20
  21. By: Jorge Gallego; Juan D. Martínez; Kevin Munger; Mateo Vásquez
    Abstract: The decades-long Colombian civil war nearly came to an official end with the 2016 Peace Plebiscite, which was ultimately defeated in a narrow vote. This conflict has deeply divided Colombian civil society, and non-political public figures have played a crucial role in structuring debate on the topic. To understand the mechanisms underlying the influence of members of civil society on political discussion, we performed a randomized experiment on Colombian Twitter users shortly before this election. Sampling from a pool of subjects who had been frequently tweeting about the Plebiscite, we tweeted messages that encouraged subjects to consider different aspects of the decision. We varied the identity (a general, a scientist, and a priest) of the accounts we used and the content of the messages we sent. We found little evidence that any of our interventions were successful in persuading subjects to change their attitudes. However, we show that our pro-Peace messages encouraged liberal Colombians to engage in significantly more public deliberation on the subject.
    Date: 2017–11–30
  22. By: José Francisco Tudón Maldonado
    Abstract: Net neutrality encourages content provision but also creates congestion externalities from the increase in data traffic. I study the consequences of net neutrality in, a popular internet platform. Twitch is non-neutral because it gives priority to the most popular content providers by compressing their data, which makes them accessible to more consumers. I estimate a two-sided-market model that considers the interactions between content provision, its consumption, and congestion. Using an exogenous technological upgrade that increased data traffic, I identify the costs of congestion for content providers and for their consumers and, using exogenous time-series variations within panels, I identify the benefits of prioritization. I use the estimated preferences and technological parameters to study the counterfactual in which net neutrality is imposed in the platform, which requires priority to be allocated anonymously. Consumer welfare drops 5%, whereas content provision does not increase, but its average quality drops. I then consider a counterfactual rent-extractive platform that charges for prioritization under the non-neutral regime. In this case, net neutrality, which prohibits priority charges, increases content provision, but consumer welfare still drops due to lower content quality and congestion externalities.
    JEL: D22 D62 L13 L14
    Date: 2017–11–23
  23. By: Asongu, Simplice; Nwachukwu, Jacinta
    Abstract: This study has examined how information and communication technology (ICT) influences openness to improve the conditions of doing business in sub-Saharan Africa. The data is for the period 2000-2012. ICT is proxied with Internet and mobile phone penetration rates whereas openness is measured in terms of financial and trade globalisation. Ten indicators of doing business are used, namely: (i) cost of business start-up procedures; (ii) procedure to enforce a contract; (iii) start-up procedures to register a business; (iv) time required to build a warehouse; (v) time required to enforce a contract; (vi) time required to register a property; (vii) time required to start a business; (viii) time to export; (ix) time to prepare and pay taxes and (x) time to resolve an insolvency. The empirical evidence is based on Generalised Method of Moments with forward orthogonal deviations. While we find substantial evidence that ICT complements openness to improve conditions for entrepreneurship, the effects are contingent on the dynamics of openness, ICT and entrepreneurship. Theoretical and practical policy implications are discussed. The inquiry is based on two contemporary development concerns: the need for policy to leverage on the ICT penetration potential in the sub-region and the relevance of entrepreneurship in addressing associated issues of population growth such as unemployment.
    Keywords: Openness; ICT; Entrepreneurship; Africa
    JEL: F40 O38 O40 O55 P37
    Date: 2017–01

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