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on Payment Systems and Financial Technology |
| By: | Greene, Claire (Federal Reserve Bank of Atlanta); Stavins, Joanna (Federal Reserve Bank of Boston) |
| Abstract: | Despite the introduction of new technology and new ways to make payments, the Survey of Consumer Payment Choice (SCPC) finds that consumer payment behavior has remained stable over the past decade. In the 10 years of the survey, debit cards, cash, and credit cards consistently have been the most popular payment instruments. In 2017, U.S. consumers ages 18 and older made 70 payments per month on average. Debit cards accounted for 31.8 percent of those monthly payments, cash for 27.4 percent, and credit cards for 23.2 percent. The SCPC continues to measure new ways to shop and pay and found that the increase in the number of purchases made online between 2015 and 2017 is statistically significant. In 2017, consumers on average made 5.6 online purchases per month, which account for 8 percent of all transactions and are up from 6.9 percent of all transactions in 2015. Use of mobile technologies continued to grow: In 2017, one-third of consumers made a mobile payment, compared with one-fourth in 2015. Compared with the findings for 2015, a greater share of credit card adopters paid their balance in full at the end of the month in 2017: 45 percent in 2017 versus 41 percent in 2015. |
| Keywords: | cash; checks; checking accounts; debit cards; credit cards; prepaid cards; electronic payments; payment preferences; unbanked; Survey of Consumer Payment Choice |
| JEL: | D12 D14 E42 |
| Date: | 2018–05–10 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbdr:18-3&r=pay |
| By: | Dominique Guégan (Université Paris1 Panthéon-Sorbonne, Centre d'Economie de la Sorbonne, LabEx ReFi and Ca' Foscari University of Venezia) |
| Abstract: | Bitcoin can be considered as a medium exchange restricted to online markets, but it is not a unit of account and a store of value, and thus cannot be considered as a money. Bitcoin value is very volatile and traded for different prices in different exchanges platforms, and thus can be used for arbitrage purpose. His behavior can be associated with a high volatile stock, and most transactions in Bitcoin are aimed to speculative instruments. The high volatility in Bitcoin and the occurrence of speculative bubble depend on positive sentiment and confidence about Bitcoin market: several variables may be considered as indicators (volume of transactions, number of transactions, number of Google research, wikipedia requests). The star of the crypto-currencies has attained the 19 716 dollars in December 2017 and decreased to 6 707 dollars March 29, 2018. In capitalization it is at this time the 30th mondial currency. We explain some limits and interests of the Bitcoin system and why the central bankers and regulators need to take some decision on its existence, and what could be the possible evolution of the Bitcoin Blockchain |
| Keywords: | Bitcoin; Blockchain |
| JEL: | C10 E4 E5 |
| Date: | 2018–03 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:18011&r=pay |
| By: | Françoise Vasselin (MATISSE - Modélisation Appliquée, Trajectoires Institutionnelles et Stratégies Socio-Économiques - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | A payment platform provides mobile money (M-money) to buyers who can also use cash to transact. An exogenous fraction of " traditional sellers " only accepts cash and creates no partnership with buyers while the remainder fraction consists of " mobile sellers " who accept M-money only and create partnerships with buyers to reduce search frictions. So, buyers without a partner must use cash and buyers with a partner must use M-money to trade. Buyers without a partner may hold cash, M-money, both monies or none while buyers with a partner always choose to hold M-money only or both monies. Hence, we obtain different equilibria where M-money always circulates, alone or in addition to cash. So, the partnership is a valuable coordination mechanism that makes M-money circulation permanent. Our model can explain why it may be useful to implement prescribed usages to trigger the adoption of a new payment instrument that aims to replace cash and why retailers implement partnerships through loyalty programs before the launching of their own M-money application. However, cash disappears only if traditional sellers have almost all disappeared. |
| Keywords: | cash,mobile payments,search theory,partnerships,investment cost,mobile money |
| Date: | 2018–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01722404&r=pay |
| By: | Pedro Bação (CeBER - Centre for Business and Economics Research); António Portugal Duarte (CeBER - Centre for Business and Economics Research); Hélder Sebastião (CeBER - Centre for Business and Economics Research); Srdjan Redzepagic (University Nice Sophia Antipolis) |
| Abstract: | This paper investigates the information transmission between the most important cryptocurrencies - Bitcoin, Litecoin, Ripple, Ethereum and Bitcoin Cash. We use a VAR modelling approach, upon which the Geweke’s feedback measures and generalized impulse response functions are computed. This methodology allows us to fully characterize the direction, intensity and persistence of information flows between cryptocurrencies. At this data granularity, most of information transmission is contemporaneous. However it seems that there are some lagged feedback effects, mainly from other cryptocurrencies to Bitcoin. The generalized impulse-response functions confirm that there is a strong contemporaneous correlation and that there is not much evidence of lagged effects. The exception appears to be related to the overreaction of Bitcoin returns to contemporaneous shocks. |
| Keywords: | bitcoin, cryptocurrencies, causality, Geweke feedback measures, generalized impulse response |
| JEL: | G12 G14 G15 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:papers:2018-06&r=pay |
| By: | Annarosa Pesole (European Commission - JRC); Maria Cesira Urzi Brancati (European Commission - JRC); Enrique Fernandez Macias (European Commission - JRC); Federico Biagi (European Commission - JRC); Ignacio Gonzalez Vazquez (European Commission - JRC) |
| Abstract: | The recent surge of digital labour platforms has led to new forms of work organisation and tasks distribution across the workforce. This has raised several questions about the functioning and the benefits deriving from the reorganisation of work that those platforms entail and the associated risks. The European Commission assessed online platforms in a May 2016 communication, focusing on both their innovation opportunities and regulatory challenges. In June 2016 the Commission also adopted its European Agenda for the Collaborative Economy, which clarified the concept and provided some guidance on the employment status of platform workers and the EU definition of worker. The European Pillar of Social Rights aims to address some of the policy challenges associated to new forms of employment, including platform work. As accompanying initiatives, the Commission presented in December 2017 a proposal for a new Directive on transparent and predictable working conditions, and in March 2018 a proposal for a Council Recommendation on access to social protection for workers and the self-employed. A crucial issue in designing the policy response to the emergence of digital labour platforms is the lack of reliable evidence. In 2017, the JRC conducted the COLLEEM pilot survey, an initial attempt to provide quantitative evidence on platform work, responding to calls by the European Council and the European Parliament. The survey provides a basis for an initial estimation of platform work in 14 Member States. |
| Keywords: | platform work, digital labour platform, collaborative economy, gig economy, digital economy |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc112157&r=pay |
| By: | Dominique Guegan (UP1 - Université Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Labex ReFi - UP1 - Université Panthéon-Sorbonne, IPAG BUSINESS SCHOOL - IPAG BUSINESS SCHOOL PARIS, University of Ca’ Foscari [Venice, Italy]); Marius Frunza (Schwarzthal Kapital, Labex ReFi - UP1 - Université Panthéon-Sorbonne) |
| Abstract: | The aim of this research is to explore the econometric features of Bitcoin-USD rates. Various non-Gaussian models are fitted to daily returns in order to underline the unique characteristics of Bitcoin when compared to other more traditional currencies. Market efficiency hypothesis is tested further, and the main reasons for breaches in efficiency are discussed. The main goal of the paper is to assess the presence of bubble effects in this market with customized tests able to detect the timing of various bubbles. The results show that the Bitcoin prices had two episodes of rapid inflation in 2014 and 2017. |
| Keywords: | timeseries modeling,market efficiency,bubbles,Bitcoin,crypto-currencies |
| Date: | 2018–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01822992&r=pay |
| By: | Guerino Ardizzi (Bank of Italy); Michele Savini Zangrandi (Bank of Italy) |
| Abstract: | Interchange fees (IF) are fees that a cardholder’s bank (issuer) receives from the merchant’s bank (acquirer) when a card payment is executed. Interchange fees are an important part of the fees charged to merchants by acquirers. Because of their level and fragmentation, interchange fees can restrict competition and have thus been regulated in the EU. The Interchange Fee Regulation (IFR) came into effect for all EU member states in 2015 and sets maximum limits on interchange fees. By using a panel of Italian banks we assess the impact of introducing the IF regulation on the fees that acquiring banks charge to merchants (merchant fees), and on the merchants’ acceptance of card-based payments. We find that, in line with the regulatory intent, the ceiling imposed on interchange fees has led to a sizeable drop in merchant fees and to an increase in the acceptance of card payments, measured as transactions per terminal. |
| Keywords: | interchange fee, payment card, acquiring, point of sale, banking panel data |
| JEL: | E41 G14 G21 G38 L14 L42 L51 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_434_18&r=pay |
| By: | Angrisani, Marco (University of Southern California); Foster, Kevin (Federal Reserve Bank of Atlanta); Hitczenko, Marcin (Federal Reserve Bank of Atlanta) |
| Abstract: | This document serves as the technical appendix to the 2015 and 2016 editions of the Diary of Consumer Payment Choice (DCPC) administered by the Center for Economic and Social Research. The DCPC is a study designed primarily to collect data on financial transactions over a three-day period by U.S. consumers ages 18 and older. In this data report, we detail the technical aspects of the survey design, implementation, and analysis. |
| Keywords: | survey design; sample selection; raking; survey cleaning; poststratification estimates |
| JEL: | D12 D14 E4 |
| Date: | 2018–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbdr:18-2&r=pay |
| By: | Bruno Skrinjaric (The Institute of Economics, Zagreb); Jelena Budak (The Institute of Economics, Zagreb); Edo Rajh (The Institute of Economics, Zagreb) |
| Abstract: | This paper examines the impact of regulation as an antecedent of online privacy concern. The aim is to investigate if and how perceived effectiveness of government regulation affects internet users’ concern for their privacy in the online environment. Existing research shows that perceived effectiveness and enforcement of regulatory policies reduce online privacy concern; however, it does not explain what factors influence this relationship. This research fills the gap by analyzing different perceptions of the existing country legislation and government effort to protect online privacy in the context of socio-demographic characteristics of respondents, computer anxiety, individual desire to maintain control of personal information, as well as intensity and diversity of online activities. The empirical analysis is conducted on a large sample of internet users in Croatia. The dependent variable in the regression model is online privacy concern and the model is tested with OLS and ordered probit estimation. The results confirm that perceived effectiveness of government regulation reduces online privacy concern whereas computer anxiety has a major positive impact on online privacy concern. These findings might be useful for national policy-makers and for business strategies in the context of the GDPR regulation coming in force in 2018. |
| Keywords: | regulation, data protection, online privacy concern, Croatia |
| JEL: | D1 K2 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:iez:wpaper:1803&r=pay |
| By: | Afees A. Salisu (Department for Management of Science and Technology Development, Ton Duc Thang University, Ho Chi Minh City, Vietnam Faculty of Business Administration, Ton Duc Thang University, Ho Chi Minh City, Vietnam Centre for Econometric and Allied Research, University of Ibadan); Idris Adediran (Department of Economics, Obafemi Awolowo University, Nigeria.) |
| Abstract: | The study will be the first to offer empirical justification for time-varying stochastic volatility in Bitcoin returns. Specifically, it tests for time variation in both the trend and transitory components of the stochastic volatility using the unobserved components model that accounts for same. Thereafter, it calculates the Bayes factor using the approach of Chan (2018) which involves the Savage-Dickey density ratio in order to avoid the computation of the marginal likelihood. The results overwhelmingly support at least one time-varying stochastic volatility component in Bitcoin returns and the transitory component is favoured in this regard. These results are robust to different data frequencies. |
| Keywords: | Bitcoin returns, Time-varying stochastic volatility, Bayes factor |
| JEL: | C11 C53 G17 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cui:wpaper:0060&r=pay |
| By: | Mohamad Buheji (International Institute of Inspiration Economy); Dunya Ahmed (International Institute of Inspiration Economy) |
| Abstract: | With the consistent turbulences in our socio-economies, rapid innovation of business models is gaining greater importance and demand today more than ever before. The integration of business models with economics behavior are creating exciting momentum in a knowledge and innovation based economy. Despite the number of publications appeared, there are a gap in the literature about the how organisations design and change business models successfully and with innovative way that improve, develop or disrupt the market. Flowers et. al (2017) focus on how innovation is changing the way we capture opportunities. " Capturing the Innovation Opportunity Space " focus on exploring how the business community is shifting to more collaborative ways of working with users, online communities and the crowd opens up novel business possibilities. " The Innovation Opportunity Space " bring in an approach that tend to enable managers, policymakers and academics to better realise the emerging new business opportunities. The book uses findings from varieties of case studies that was used on most of the chapters, which provided a systematic and clear understanding of the radical business models that the new forms of innovation are making possible. Developing an innovative business model that capture the value and identify the opportunities is very important for both developing and developed countries. Flowers et. al (2017) shows different interpretations of what innovation is about and how to measure it. Examples and case studies explored in this book shows how firms have benefited from the different forms of innovation. The book brilliantly introduces a novel approach to innovation planning and strategy, with four-stage process that shows how firms can work to capture their own Innovation Opportunity Space. The intellectual property of the different business models is also discussed in detail. In addition, the book linked between understanding innovation and open access software and how the public sector just explored open data. Flowers et. al (2017) discussed how the innovative process lead to mapping a new world via innovation opportunities space that varies and is analyzed by focusing on Architectures, Actors, Activists and Aftershocks. As the book is result of project funded by a Finland agency, most of examples as well came from Finland experiences and industry such as forest industry. The richness of the book is the figures used to explain theories and ideas in interesting way. However, the book failed short to show the methodological tools that help in capturing innovation opportunities. It could have helped the editors also to link things to cultural and social matter, which make it difficult to underhand and to reapply in other context. It is worth to mention that the book focus on social innovation, but not how it can be utilized. Although the book is about innovation, though it explains business model in it classical way affected by capitalism economist mindset, for example, changing retail business model from 'shop floor based' to 'electronic commerce based' is not considered as an innovation, it is rather a growth that describe the changes in life style, supported by the use of exciting technology and advisement of social media. It is highly recommended that future editions of this book include how to build innovative business models and how developing countries can use this model. In overall, we recommend this book for innovation centres, entrepreneurship-focused incubators, Innovation and Entrepreneurship leading professors and government policy planners. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01820467&r=pay |
| By: | Carmen Berne Manero; María Gómez Campillo; Mercedes Marzo Navarro |
| Abstract: | La literatura sobre la cadena de valor calidad-satisfacción-lealtad de servicios turísticos online, no es concluyente. Los modelos son parciales y las mediciones de las variables no están consensuadas. Este trabajo revisa el papel de las variables básicas y sus modelos de medida a través de una aplicación práctica. Se validan los modelos para cada variable, confirmando su dimensionalidad: la calidad de la página web, los costes de transacción, la satisfacción y la lealtad intencional. Finalmente, se formulan relaciones entre las variables y se propone un modelo teórico integral, implicaciones para la gestión y líneas de investigación futuras. |
| Keywords: | Calidad percibida de la página web, costes de transacción percibidos, modelos de medida, servicios turísticos online, satisfacción, lealtad. |
| JEL: | M15 M31 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:ovr:docfra:1804&r=pay |
| By: | Juan Sebastián Sanabria |
| Abstract: | En la actualidad, las Tecnologías de la Información y la Comunicación (TIC) son esenciales para el desarrollo de los países y la calidad de vida de las personas; su uso es, cada vez, más masivo y la familiarización con estas crece constantemente. En este sentido, el objetivo principal de este documento es determinar la dinámica de los servicios de internet móvil en Colombia como parte fundamental de las TIC, su penetración, calidad y el costo del servicio respecto a los ingresos totales de los grupos familiares. Así también, se analizan las cifras de uso, cobertura y calidad del internet móvil; y se estudian las resoluciones de la Comisión de Regulación de las Comunicaciones (CRC) y su aplicabilidad con el fin de determinar cuáles prácticas permiten la mejora continua en la prestación, calidad, acceso, tecnología y tarifas para el consumidor. |
| Keywords: | tecnología, internet móvil, regulación económica, tecnologías de la Información |
| JEL: | L51 L86 O30 |
| Date: | 2018–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:col:000176:016408&r=pay |
| By: | Mora Villarrubia, Ricardo; Li, Yunrong |
| Abstract: | We use longitudinal individual data from a nationally representative sample of Chinese children aged 10 to 15 to investigate whether a partial ban on internet use affects offline social interactions among adolescents. We present both IV and mixed logit estimates and control for spillover effects and unobservable heterogeneity. Although online and offline relationships are strongly positively correlated, the existence of unobservable common tastes for social interactions at household level explains an important part of this correlation. We also find that (i) most children do reduce their offline social relationships when facing limits to their use of social networking sites; (ii) there are spillover effects in the sense that these negative effects increase with the size of the online local network; (iii) the negative effects are sizable and statistically significant for older children (aged 14 and 15); and (iv), for these older children, they occur even after discounting the network effect. To sum up, we find large negative effects on offline social relationships for older children even if the limits are imposed to all children simultaneously. |
| Keywords: | Online social relations; complementarity; unobservable common tastes |
| JEL: | J14 J13 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:cte:werepe:27163&r=pay |
| By: | Aleksei Yu. Kondratev (National Research University Higher School of Economics); Alexander S. Nesterov (National Research University Higher School of Economics) |
| Abstract: | We study practically relevant aspects of popularity in two-sided matching where only one side has preferences. A matching is called popular if there does not exist another matching that is preferred by a simple majority. We show that for a matching to be popular it is necessary and sucient that no coalition of size up to 3 decides to exchange their houses by simple majority.We then constructively show that a market where such coalitions meet at random converges to a popular matching whenever it exists. |
| Keywords: | two-sided matching, popular matching, random paths, house allocation, assignment problem |
| JEL: | Z |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:195/ec/2018&r=pay |
| By: | Fochmann, Martin; Müller, Nadja; Overesch, Michael |
| Abstract: | As a consequence of the digital transformation, individuals are often confronted with prefilled forms or prefilled data entry masks. In situations where cheating and lying are of concern, prefilling and defaults might reduce dishonest behavior. In a controlled experiment, we investigate how correctly and incorrectly prefilled forms influence compliance behavior. We frame our experiment as filing the annual income tax return. We show that correct prefilling enhances compliance. However, in cases of incorrect prefilling, we observe asymmetric effects. If prefilled income is lower than true income, we find no positive compliance effect, and compliance is on the same level as with blank forms. If prefilled income is higher than true income, prefilling still has a positive effect on compliance. In that case, compliance is on the same level as with correctly prefilled forms and higher than with blank forms. Our study contributes to the literature on cheating and lying by showing that prefilled forms and defaults affect compliance by changing the moral costs of dishonest behavior. |
| Keywords: | Dishonesty,Defaults,Prefilled Forms,Tax Compliance,Behavioral Economics |
| JEL: | C91 D14 H26 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:arqudp:227&r=pay |
| By: | Khalamillah, Fahmi |
| Abstract: | Ibn Taimiyah Is an Islamic thinker and scholar of Harran, Turkey, According to Ibn Taimiyah in terms of money, he said that the main function is as means demand value and as a medium to facilitate the exchange of an item. The method of research in this article using a descriptive method that aims to discuss the function of money and money trading according to Ibn Taimiyah. The results of this study show that Islam has its own concept of the main function of money only as a means of exchange in transactions. |
| Keywords: | Ibn Taimiyah, Money, Trade |
| JEL: | B20 E40 E51 |
| Date: | 2018–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:87018&r=pay |
| By: | Paridhi Choudhary; Aniket Jain; Rahul Baijal |
| Abstract: | This paper analyzes Airbnb listings in the city of San Francisco to better understand how different attributes such as bedrooms, location, house type amongst others can be used to accurately predict the price of a new listing that optimal in terms of the host's profitability yet affordable to their guests. This model is intended to be helpful to the internal pricing tools that Airbnb provides to its hosts. Furthermore, additional analysis is performed to ascertain the likelihood of a listings availability for potential guests to consider while making a booking. The analysis begins with exploring and examining the data to make necessary transformations that can be conducive for a better understanding of the problem at large while helping us make hypothesis. Moving further, machine learning models are built that are intuitive to use to validate the hypothesis on pricing and availability and run experiments in that context to arrive at a viable solution. The paper then concludes with a discussion on the business implications, associated risks and future scope. |
| Date: | 2018–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1805.12101&r=pay |
| By: | Matilde Mas (University of Valencia and Instituto Valenciano de Investigaciones Económicas (IVIE)); Juan Fernandez de Guevara (University of Valencia and Instituto Valenciano de Investigaciones Económicas (IVIE)); Juan Carlos Robledo (Instituto Valenciano de Investigaciones Económicas (IVIE)); Melisande Cardona (European Commission - JRC); Montserrat Lopez-Cobo (European Commission - JRC); Riccardo Righi (European Commission - JRC); Sofia Samoili (European Commission - JRC) |
| Abstract: | The 2018 PREDICT Key Facts Report provides a detailed analysis of the state of ICT R&D activities in the European Union. This is the eleventh edition of a series that is published annually. Like the previous editions, an online version is available at: https://ec.europa.eu/jrc/en/predict. The report covers the period between 1995 and 2015, providing a long-term analysis of the European Union (EU) ICT sector and its R&D, covering a whole cycle from the initial expansion years, to the double recession that began in early 2008, and the most recent evolution up to 2015. Whenever possible, the report includes nowcasted data for 2016 and 2017. The statistical information provided by the figures allows comparing the ICT sector with the total economy; the ICT manufacturing sector with the ICT services sector; each of the four ICT manufacturing, two ICT services, MC and RS sectors’ behaviour; the pace followed by each EU country; and the pattern of the EU in an international context, including the most relevant countries from the perspective of the role they play in the world economy today, especially from the ICT R&D perspective. |
| Keywords: | R&D, ICT, innovation, statistics, digital economy, ICT industry analysis, ICT R&D and innovation |
| JEL: | O30 O32 O52 |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc112019&r=pay |
| By: | Egor A. Krivosheya (National Research University Higher School of Economics) |
| Abstract: | This article evaluates the efficiency of current MIF rates for the Russian market and identifies the effects of their changes. In order to estimate the demand of end users and end-user surpluses the study uses the adopted version of the Bedre-Defolie and Calvano (2013) model as well as representative samples of 800 traditional (offline) Russian merchants, 1500 Russian individuals and 7 banks from the top 20 that cover more than 80% of the Russian issuing and acquiring markets and the end-user benefits. Results confirm the efficiency of currently set MIF rates. Comparative statics analysis confirms that the changes in MIF rates never lead to a Pareto improvement, while the total surplus changes are asymmetric across different market parts. The article also shows that once the realistic assumptions are introduced to the models (e.g., information asymmetry, imperfect pass-through of changes) the end-user welfare is distorted more severely as a result of the MIF rates changes. The first-best policy for the Russian regulator and legislators is the use of alternative (non-tariff) stimulating measures for a cashless economy in order to isolate the effect of changes to the intended groups |
| Keywords: | Retail payments; payment cards; interchange fees; efficiency; optimal regulation |
| JEL: | G21 D53 E42 L14 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:66/fe/2018&r=pay |
| By: | Greil, Stefan (University of Hamburg); Schwarz, Christian (Department of Economics of the Duesseldorf University of Applied Sciences); Stein, Stefan (Quantum Steuerberatungsgesellschaft mbH) |
| Abstract: | The OECD Base Erosion Profit Shifting (BEPS) Initiative as well as the current fairness oriented public discussion regarding the taxation of digital business models highlight the importance and complexity of the arm’s length principle. In a theoretical model of an internationally fragmented digital good’s production process, we show that fairness considerations of tax authorities (namely inequity aversion) can result in a falling apart between a perceived “fair” and arm’s length distribution of profits across tax jurisdictions. Our model predicts that a multinational firm follows the fundamental paradigm of international taxation, i.e. the arm’s length principle, to properly incentivize internal agents involved in the production of a digital good. However, with inequity averse tax authorities, we find that tax authorities “prefer” a more equal distribution of profits compared to the arm’s length allocation. From a multinational firm’s perspective, inequity aversion among tax authorities dampens the strategic effect to – in accordance with arm’s length principle – shift profits to low tax countries. |
| Abstract: | Die OECD Base Erosion Profit Shifting (BEPS) Initiative sowie die aktuelle Fairness orientierte öffentliche Diskussion zur Besteuerung digitaler Geschäftsmodelle verdeutlichen die Bedeutung und Komplexität des Fremdvergleichsgrundsatzes. Wir modellieren einen international fragmentierten Produktionsprozess eines digitalen Gutes und zeigen wie Fairness-Erwägungen von Steuerbehörden (d.h. Ungleichheitsaversion) dazu führen kann, dass die als „fair“wahrgenommene und die zum Fremdvergleichsgrundsatz konforme Gewinnverteilung innerhalb der Steuerjurisdiktionen auseinander fällt. Unser Modell sagt voraus, dass ein multinationales Unternehmen dem fundamentalen Paradigma der internationalen Besteuerung, d.h. dem Fremdvergleichsgrundsatz folgt, um firmenintern effiziente Anreize zur Produktion des digitalen Gutes zu setzen. Ungleichheitsaversion auf Seiten der Steuerbehörden führt allerdings dazu, dass die Steuerbehörden eine gleichmäßigere Verteilung der Gewinne im Vergleich zum Fremdvergleichsgrundsatz bevorzugen. Aus Sicht eines multinationalen Unternehmens dämpft die Ungleichheitsaversion der Steuerbehörden den strategischen Anreiz Gewinne in Niedrigsteuerländer zu verlagern. |
| Keywords: | corporate income tax, profit-shifting, arm's length principle, fairness, Unternehmensbesteuerung, Gewinnverlagerung, Fremdvergleichsgrundsatz |
| JEL: | H26 H25 F23 |
| URL: | http://d.repec.org/n?u=RePEc:ddf:wpaper:42&r=pay |