nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2019‒01‒14
forty papers chosen by
Bernardo Bátiz-Lazo
Bangor University

  1. A cunning State control – an unprecedented regulatory challenge brought forward by the Chinese social media giant "WeChat" By Li, Grace
  2. Digital Finance Revolution in E. Africa: Retail Bank's Adaption to a changing Marketplace By Cornelius, Kalenzi; Kwon, Youngsun
  3. From Commodity to Fiat and Now to Crypto: What Does History Tell Us? By Barry Eichengreen
  4. Reducing internet demand-side gap improves digital inclusion in low-income countries: - analysis that is more comprehensive By Haile Teklemariam, Mekuria; Kwon, Youngsun
  5. Internet of things (IoT) platform competition: consumer switching versus provider multihoming By Basaure, Arturo; Vesselkov, Alexandr
  6. Navigating new marketing technologies, channels and metrics By Petra Leonora Cvitanović
  7. The Impacts of Mobile Platform openness on The Knowledge Sharing intention of Third Party Developers By Choi, Goya
  8. The Internet of Things (IoT): A Survey of Topics and Trends using Twitter Data and Topic Modeling By Chae, Bongsug (Kevin)
  9. ICT, Financial Access and Gender Inclusion in the Formal Economic Sector: Evidence from Africa By Simplice A. Asongu; Nicholas M. Odhiambo
  10. Cash and the Economy: Evidence from India's Demonetization By Gabriel Chodorow-Reich; Gita Gopinath; Prachi Mishra; Abhinav Narayanan
  11. Electronic Commerce: Theory and Practice By Išoraitė, Margarita; Miniotienė, Neringa
  12. Circulation of loyalty: Relationships between mobile messenger service and offline flagship store By Kim, Junghwan; Choi, Mideum; Hwang, ShinYoung
  13. FinTech and the Search for Full Stack Financial Inclusion: a speech at the FinTech, Financial Inclusion -- and the Potential to Transform Financial Services Hosted by the Federal Reserve Bank of Boston and the Aspen Institute Financial Security Program, Boston, Massachusetts By Brainard, Lael
  14. Internet of Things: Exploring households' intention to use smart home technology By Nikou, Shahrokh
  15. How disruptive are disruptive operators? By Vialle, Pierre; Whalley, Jason; Parisot, Xivier
  16. Why did Uber China fail in China? – Lessons from Business Model Analysis By Liu, Yunhan; Kim, Dohoon
  17. Limits to arbitrage in markets with stochastic settlement latency By Hautsch, Nikolaus; Scheuch, Christoph; Voigt, Stefan
  18. New wine in old bottles? An analysis of communication research trends focusing on media By Lee, So-Eun; Kim, Seongcheol
  19. Empirical study on video clip consumption: Focusing on viewing habits and use motives By Lee, Ji Young; Ham, Min Jeong; Lee, Sang Woo
  21. In the Eye of the Beholder? Empirically Decomposing Different Economic Implications of the Online Rating Variance By Dominik Gutt
  22. Consumer Preferences and Market Structure in Credit Card Markets: Evidence from Turkey By G. Gulsun Akin; Ahmet Faruk Aysan; Ezgi Özer; Levent Yildiran
  23. The Price of BitCoin: GARCH Evidence from High Frequency Data By Pavel Ciaian; d'Artis Kancs; Miroslava Rajcaniova
  24. What Are We Learning about Artificial Intelligence in Financial Services?: a speech at Fintech and the New Financial Landscape, Philadelphia, Pennsylvania By Brainard, Lael
  25. Cryptoasset Factor Models By Zura Kakushadze
  26. An Institutional Analysis of Environmental Management in Korean Mobile Communications Industry By Kim, Dokyung; Kim, Seongcheol
  27. E-commerce in Hungary: A Market Analysis By Szabolcs Nagy
  28. Optimizing Market Making using Multi-Agent Reinforcement Learning By Yagna Patel
  29. Crowd-Driven Competitive Intelligence: Understanding the Relationship Between Local Market Competition and Online Rating Distributions By Dominik Gutt; Philipp Herrmann; Mohammad S. Rahman
  30. On Commercial Preferences of TV Audiences: Payment for Avoidance, Type of Commercial, and Content Volume By Shishikura, Manabu; Kasuga, Norihiro; Nakamura, Akihiro
  31. A Study of Startups in Hong Kong By Lee, Paul S. N.
  32. The Influence of Corporate Strategy for Multi-Channel Network on Firm Performance: Make, Buy, or Ally? By Chang, Seoyon; Kim, Seongcheol
  33. A Homeowner’s Guide to Airbnb: Theory and Empirical Evidence for Optimal Pricing Conditional on Online Ratings By Jürgen Neumann; Dominik Gutt; Dennis Kundisch
  34. Working in the gig economy. Evidence from the Italian food delivery industry By Cristina Giorgiantonio; Lucia Rizzica
  35. Exploring killer business domains for drones in Korea By Kwon, Hyeseon; Kim, Seongcheol
  36. Influence of Social Network Effect and Incentive on Choice of Star Labeled Cars in India: A Latent Class Approach based on Choice Experiment By Charu Grover; Sangeeta Bansal; Adan L. Martinez-Cruz
  37. Conditional heteroskedasticity in crypto-asset returns By Shaw, Charles
  38. Would satisfaction with smart speakers transfer into loyalty towards the smart speaker provider? By Hwang, ShinYoung
  39. Universal service in a digital world: The demise of postal services By Falch, Morten; Henten, Anders
  40. The Political Economy of Business Elites in Tunisia: Actors, Strategies and Identities By Mohamed Oubenal

  1. By: Li, Grace
    Abstract: China is the largest country by smart phone user and Internet user. By 2017, China has over 1 billion smart phone users and over 70% of its entire population having access to the Internet.1 With severe State censorship and the Great Firewall of China, the worldwide social-media platforms such as Facebook and Tweeter are not accessible in China. This situation has created great opportunities for Chinese companies to generate China's own version of its social media platforms – WeChat, a mobile based, all-purpose social media application has become the answer. Developed by Chinese multinational investment holding conglomerate Tencent, WeChat originally started in 2010 with a Chinese name "Weixin" (literally meaning "micro-message")2. WeChat quickly rose in popularity and the number of active users has reached over one billion in March 2018,3 which means almost every single smart phone user in China would had WeChat installed in their device. Unlike itsWestern counterparts, Facebook Messenger and WhatsApp, WeChat's features were not only limited to Internet messaging. Apart from messaging, voice and video calls, WeChat also offered services such as digital wallet payments, booking doctor appointments, booking taxi and paying electricity bills under the WeChat City Services4, crowd density map used by the government5, reading news, play games, and many more. As WeChat has developed into the China's all-in-one app, dominate proportion of Chinese smartphone users are now less likely dependent on any other apps and solely rely on WeChat for everything...
    Date: 2018
  2. By: Cornelius, Kalenzi; Kwon, Youngsun
    Abstract: The question of how retail banks adapt to a changing market place that is driven by disruptive Fintech firms is increasingly becoming important. This is especially critical in East Africa where banks have traditionally had limited presence. This paper examines the impact of digital technologies such as mobile money and mobile banking on retail banks' channel strategy. We introduce a technology and innovation adaptation model for retail banks; consisting of digital channel adoption, changing consumer preference and how these factors influence banks' adaptation strategies and distribution channels. A SEM analysis based on a survey of over 100 bank managers from mainly cross border retail banks in East Africa was carried out. The study results suggests that digitization and consumer preferences have statistically significant impact on retail banks' adaption strategy. Our findings show that, for retail banks to remain competitive and relevant in the new digital marketplace, they must think beyond traditional distribution strategies such as branch banking and embrace new possibilities provided by digitization like digital banking services. While some banks that offer a mixture of traditional and multi-channel models are attractive to the consumers, others that partner with new players such MNOs to offer digital banking stand at a higher competitive edge. The key implication is that digitization is tied to success of retail banks in the new market place.
    Keywords: Retail Banking,Digital Finance,Mobile Banking,Financial Policy,E. Africa
    Date: 2018
  3. By: Barry Eichengreen
    Abstract: Over time, there has been a tendency for political jurisdictions and residents to converge on a single currency. Monopoly over seigniorage is a source of political power and a valuable lifeline when sovereignty is threatened. Moreover a uniform currency, insofar as it is free of counterparty and liquidity risk, facilitates economic activity. But will digital currencies now reverse this trend toward uniformity, given the apparent ease with which they can be created? The information sensitivity of those units, evident in the fact that they trade at varying prices, suggests that they do not yet provide the core functions of money. So-called stable coins are intended to bridge this gap, but whether they can be successfully scaled up and maintain their stability is doubtful. The one unit that can clearly meet these challenges is central bank digital currency. But there would be both costs and benefits of moving in this direction.
    JEL: E4 E40 F0 N0
    Date: 2019–01
  4. By: Haile Teklemariam, Mekuria; Kwon, Youngsun
    Abstract: Reducing the broadband demand-side gap brings greater improvement in digital inclusion especially in low-income countries compared to developed economies. The demand-side gap between network coverage and penetration is less than 10% in developed countries. However, the digital divide and demand-side gap in low-income countries reach 60% and 30% respectively. From this, we developed the hypothesis: the effective use of existing internet facilities can reduce half of the digital divide in low-income countries. To test this hypothesis using regression analysis, we collected four-year data of 120 economies with 44 factors. The present study findings show that 100 points change in policy and regulation of ICT, energy infrastructure, gender literacy, software piracy rate, demographic dividend, competition in telecom sector, network coverage and quality, digital content, digital skill, and gender income will bring 5.5, 10, 6, -15.8, 12, 12.5, 12, 12.5, 24.4, 13, 15, and 8.5 points change in the internet usage of individuals respectively. Furthermore, 100 points change in this internet usage of the individuals will also bring 51.9 points increase on use of the existing network facilities. This implies that low-income countries can improve their total internet subscription significantly by increasing the internet usage of individuals without having further investment. Therefore, low-income countries can use these findings as input for their digital inclusion policy that shows how to improve the driving factors and internet subscription of their citizens.
    Keywords: Demand-side gap,low-income countries,digital skill,internet usage of individual,infrastructure access
    Date: 2018
  5. By: Basaure, Arturo; Vesselkov, Alexandr
    Abstract: Platforms that are understood as a place or system coordinating the interaction of different stakeholders (e.g., service consumers and providers) may enable widespread adoption of IoT services and applications. However, the lack of interoperability between platforms may inhibit the diffusion of IoT services by preventing reaching a critical mass and reducing competition as it makes consumer switching and service provider multihoming prohibitively expensive. Moreover, network effects inherent in multisided platforms may lead to a monopoly power in IoT market. This paper analyzes the effect of consumer switching costs and provider multihoming on market structure and competition by means of agent-based modelling. Simulation results suggest that service provider multihoming plays a key role in increasing market competition when switching costs decrease due to, for example, consumer data portability.
    Keywords: IoT,interoperability,network effect,data sharing,consumer switching,service provider multihoming,coopetition
    Date: 2018
  6. By: Petra Leonora Cvitanović
    Abstract: Modern technologies in all industries are drastically changing the behaviour of the consumers as well as their purchasing patterns. Companies are directing their marketing investment resources into mobile and online while the traditional marketing channels slowly become less effective because of the new generation of consumers and more effective targeting possibilities. New retail technologies offer many possibilities for reaching consumers directly through their mobile phones when they are in the store. A variety of marketing analytics tools helps the companies to measure marketing performance in both online and mobile channel. The goal of this paper is to analyse the advantages of today’s marketing technologies, marketing channels and marketing metrics and to identify some of the difficulties which companies face in navigating them. The conclusion is that companies which resist to use new technologies, channels and metrics are only hurting their business in the long run. Research methodology includes study of literature and scientific articles on digital marketing and researching YouTube videos on retail and mobile marketing.
    Keywords: new marketing technologies, multi-channel marketing, marketing analytics metrics, new generation of consumers, the future of marketing
    JEL: M30 M31
    Date: 2019–01–12
  7. By: Choi, Goya
    Abstract: In mobile platforms, knowledge sharing behaviors of third party developers play a critical role in enhancing generativity of the platform, thereby leading to the success of the platform. Developers can generate new ideas and opportunities and enhance their expertise through knowledge sharing. This paper aims to explain the intention of knowledge sharing among third party developers with the Android case based on theory of reasoned action. The effect of platform openness, which consists of accessibility and controllability, is investigated as a critical motivation of knowledge sharing. Accessibility increases the size and diversity of developer pools and enables efficiency of communication among developers. Controllability enhances the needs of knowledge sharing due to the increase in uncertainty. The results show that platform openness enhances knowledge sharing intentions of developers. In addition, other motivational factors including self-efficacy, reciprocity, reputation, and rivalry are included in the research model, and the results show that self-efficacy and reciprocity stimulate knowledge sharing while a sense of rivalry hinders the knowledge sharing. This paper provides comprehensive framework to enhance understanding of knowledge sharing in the mobile platform context.
    Keywords: Platform openness,Mobile platform,Knowledge sharing,Theory of reasoned action
    Date: 2018
  8. By: Chae, Bongsug (Kevin)
    Abstract: Extant studies have surveyed the Internet of Things (IoT) using a qualitative, literature review-based approach. These studies are similar in that the authors used predefined categories or topics such as technologies, applications, and issues, and offer a systematic review of existing studies of IoT by focusing on those individual categories. Many of these studies are technology-focused. Our study takes a digital innovation view of IoT as a complex ecosystem of technologies, industry applications, concepts, methodologies, and social institutions, which are temporally dynamic and evolve over time. Unlike the extant review/survey studies using pre-defined categories, this study attempts to investigate the ecology and evolution of IoT by extracting hidden trends from social media data using an unsupervised topic modeling approach. The proposed quantitative, topic model-based approach provides detailed information about popular categories or topics in IoT, the associations among those topics, and their evolution since 2014. By providing these quantitative findings, this study complements the qualitative approaches used in the previous studies studying the IoT landscape.
    Date: 2018
  9. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: The study investigates the relevance of information and communication technology (ICT) in modulating the effect of financial access on female economic participation. Female economic participation is proxied by female labor force participation, financial access is measured with deposit and credit channels while ICT is proxied by mobile phone penetration, internet penetration and fixed broadband subscriptions. The focus of the study is on 48 African countries for the period 2004-2014 and the empirical evidence is based on Generalized Method of Moments. Policy thresholds are established at which, ICT modulates financial access to induce favourable effects on female economic participation. These policy thresholds are: (i) 160 mobile phone penetration (per 100 people) for the deposit channel and (ii) 2.166 and 0.75 fixed broadband subscriptions per 100 people for respectively, the deposit mechanism and credit channel. Overall the study supports the importance of ICT in moderating financial access for enhanced female economic participation.
    Keywords: Africa; Gender; ICT; Inclusive development
    JEL: G20 I10 I32 O40 O55
    Date: 2018–01
  10. By: Gabriel Chodorow-Reich; Gita Gopinath; Prachi Mishra; Abhinav Narayanan
    Abstract: We analyze a unique episode in the history of monetary economics, the 2016 Indian “demonetization.” This policy made 86% of cash in circulation illegal tender overnight, with new notes gradually introduced over the next several months. We present a model of demonetization where agents hold cash both to satisfy a cash-in-advance constraint and for tax evasion purposes. We test the predictions of the model in the cross-section of Indian districts using several novel data sets including: a data set containing the geographic distribution of demonetized and new notes for causal inference; nightlights data and employment surveys to measure economic activity including in the informal sector; debit/credit cards and e-wallet transactions data; and banking data on deposit and credit growth. Districts experiencing more severe demonetization had relative reductions in economic activity, faster adoption of alternative payment technologies, and lower bank credit growth. The cross-sectional responses cumulate to a contraction in employment and nightlights-based output due to demonetization of 2 p.p. and of bank credit of 2 p.p. in 2016Q4 relative to their counterfactual paths, effects which dissipate over the next few months. We use our model to show these cumulated effects are a lower bound for the aggregate effects of demonetization. We conclude that unlike in the cashless limit of new-Keynesian models, in modern India cash serves an essential role in facilitating economic activity.
    JEL: E5 O23
    Date: 2018–12
  11. By: Išoraitė, Margarita; Miniotienė, Neringa
    Abstract: Electronic commerce in the world is becoming an increasingly popular form of trade. Most shoppers start looking for products, descriptions and quality features online before buying a product. In order to provide customers with more convenience, more and more companies and existing stores are setting up their own online stores where a person can buy at a convenient time, even at night when regular stores are no longer working. Online stores allow you to save time spent by a person searching for a particular product and driving through shops. The article analyzes the concept of e-commerce, the advantages and disadvantages of electronic commerce, and the situation of electronic commerce in Lithuania.
    Keywords: Electronic commerce; Internet; E-commerce advantages and disadvantages
    JEL: L81
    Date: 2018–06–04
  12. By: Kim, Junghwan; Choi, Mideum; Hwang, ShinYoung
    Abstract: LINE, the global mobile messenger service provider, has been extending its online business to the offline platform. Among many services, LINE FRIENDS, which manages the character business of LINE, launched an offline flagship store in Korea, Japan, and Southeast Asia (LINE FRIENDS, 2018.01.25). Among the 45 stores around the world, LINE FRIENDS opened a large scale flagship store in New York in August 2017. Characters which were originally created for online stickers soon became the key business component of the flagship store. LINE FRIENDS has collaborated with renowned global brands such as LAMY, MR MARIA, THERMOS, SWAROVSKI, BROMPTON, and L'OCCITANE. People who visit offline flagship stores can not only buy collaboration products but also enjoy time at the character themed cafe. KAKAO which operates a major mobile messenger service in Korea has also launched its first flagship store in April 2014. Around 10 thousands visitors are reported to visit KAKAO's flagship store (KAKAO FRIENDS) every day...
    Date: 2018
  13. By: Brainard, Lael (Board of Governors of the Federal Reserve System (U.S.))
    Date: 2018–10–17
  14. By: Nikou, Shahrokh
    Abstract: Smart home technology, an application of Internet of Things (IoT), provides householders with e.g., comfort, control and convenience. The technology has been around for sometimes, but its prevalence is not yet widespread, and thus the potentials have largely been underestimated. This paper aims to explore the antecedent factors influencing the adoption of smart home technology through analysis of a survey data comprising of 156 households. This paper, in addition to Structural Equation Modelling (SEM), applies an analytical thinking method called "Fuzzy-set Qualitative Comparative Analysis" to analyse the data. The SEM results indicate that consumer perceived innovativeness, perceived newness, social influence and attitude toward using smart home technology are notable antecedents of intention to use. Moreover, the results show that the perceived cost negatively affect the intention to use. FsQCA results, while confirming SEM findings, strengthen the results by revealing that there is no single solution that lead to the outcome, but multiple configurations of conditions lead to the outcome of interest. This paper contributes to the literature of IoT, in particular to smart home research. Some practical implications and research recommendations are discussed. Keywords: Internet of Things, Smart home technology, Perceived cost, Fuzzy-set Qualitative Comparative Analysis
    Date: 2018
  15. By: Vialle, Pierre; Whalley, Jason; Parisot, Xivier
    Abstract: The issue of disruptive operators has recently gained interest among researchers and regulators. From a regulator's perspective, disruptive operators can increase competitive rivalry in markets dominated by a handful of large companies, thus allowing consumers to obtain more benefits in terms of price and quality. However, the "disruptive" qualification of an operator in related studies does not rely on a precise definition of disruption. The disruption theory, as developed by Christensen, provides such a definition but may be too restrictive. In addition, it may not be adapted to the analysis of disruption in regulated industries such as telecommunications. In this paper, we aim at deepening our understanding of disruption in the case of the Telecommunications industry, by analysing cases of mobile operators who entered the industry thanks to 3G or 4G licences. To this end we first analyse the disruption theory literature and highlight its characteristics and limitations. It allows us to propose an eclectic analytical framework of disruptive innovations that does not restrict to Christensen's theory. We then apply it to different cases of disruptive mobile operators in order to identify the level and pattern of disruption inherent to each case, and to compare them. We conclude by discussing our findings and further research perspectives.
    Keywords: Disruption,innovation,telecommunications,regulated industries,business model,strategy,policy
    Date: 2018
  16. By: Liu, Yunhan; Kim, Dohoon
    Abstract: The ride-hailing platform presents an on-demand business model on the basis of business ecosystems in the era of the sharing economy. The ride-hailing platforms became popular and common around the world as a sustainable option that complements the public transportation services. This article presents a case study that analyzes the intense competition between global giant Uber and Didi Chuxing in Chinese ride-hailing market. First, employing the Canvas model, we compare and analyze the characteristics of the business model of the two platforms. Our analysis and comparisons of the strategic positioning and implementation of the two platforms with respect to the major building blocks of the Canvas model finds out the success factors of Didi as well as the sources of failure of Uber. For example, although both Uber and Didi provided similar service offerings covering diverse market segments from low- to high-ends, Uber's mismatches between its strategic focus on the high-end premium segment and service operations proved to be a mistake. On the other hand, Didi operated its business more efficiently by providing a wide range of service offerings and leveraging the two-side market properly. As a result, Didi has grown successfully as a one-stop transportation platform, which is well suited to the Chinese market. This study provides important insights into business model innovations in the sharing economy and implications for the evolution of future transportation platforms.
    Keywords: Sharing economy,Ride-hailing platform,Canvas model,Uber China,Didi Chuxing
    Date: 2018
  17. By: Hautsch, Nikolaus; Scheuch, Christoph; Voigt, Stefan
    Abstract: Distributed ledger technologies rely on consensus protocols confronting traders with random waiting times until the transfer of ownership is accomplished. This time consuming settlement process exposes arbitrageurs to price risk and imposes limits to arbitrage. We derive theoretical arbitrage boundaries under general assumptions and show that they increase with expected latency, latency uncertainty, spot volatility, and risk aversion. Using high-frequency data from the Bitcoin network, we estimate arbitrage boundaries due to settlement latency of on average 124 basis points, covering 88% of the observed cross-exchange price differences. Settlement through decentralized systems thus induces non-trivial frictions affecting market efficiency and price formation.
    Keywords: Arbitrage,Settlement Latency,Distributed Ledger,Blockchain
    JEL: G00 G10 G14
    Date: 2018
  18. By: Lee, So-Eun; Kim, Seongcheol
    Abstract: Media technologies have evolved over time, competing with one another. Media are socially important agents rather than mere technological objects as they penetrate deeply into people's lives. For example, TV has been leading the mass communication age for a long time since the emergence of electronic media. Computers are multimedia devices that have led to the era of convergence by flattening different content modalities. The proliferation of mobile media brings the revolutionary changes, hastening the advent of the personal communication age. And most recently, new technologies such as wearable devices are creating unprecedented forms of communication. The transition of the major media devices leads to the fundamental sociocultural changes, which can be called 'paradigm shifts'. Then, has the paradigm of media research changed to reflect this technological and social transition? Has there been progression of research theories or methodologies that corresponds to the conversion of major media? If so, in what context? If not, why? This study aims to answer these questions through a review of more than 30 years of communication research published in the Journal of Broadcasting & Electronic Media (JOBEM).
    Date: 2018
  19. By: Lee, Ji Young; Ham, Min Jeong; Lee, Sang Woo
    Abstract: As TV viewing on mobile devices increases, Korean broadcasters provide video clips that are made by re-editing the length or format of existing broadcast content. Traditional broadcasters and cable networks provide the edited video clips of their full live programs for free. The number of video clips for each live program is different, but generally 5 to 10 video clips for each live program are provided via online or mobile. understand the behavior of video clip consumers. This study is to understand the behavior of video clip consumers. We tried to examine how video clip consumers use video clip services according to their preferences and viewing habits. This study also aims to investigate the reason why Korean people watch short clips of television content. This study investigated the relationship between video clip use motives and actual usage of video clips. To analyze additional promotional effect of video clips, this study explore what motives are related to the intention to watch the live programs and to purchase VOD.
    Keywords: TV viewing,mobile device,video clips,live programs,VOD
    Date: 2018
  20. By: Bram Faber (VU Amsterdam); Tjerk Budding (VU Amsterdam); Raymond (R.H.J.M.) Gradus (VU Amsterdam)
    Abstract: In recent years, social media has become a major venue for the interplay between citizens and public sector organizations, in order to facilitate corporate dialog. However, not much comprehensive research has been done on how interactivity between local governments and citizens takes shape. Building on earlier work that addresses municipal e-government adoption, this article does empirical work on the ways in which social media is used by all 380 Dutch municipalities. It focuses on social media usage by means of a quantitative assessment through five social media platforms: Twitter, Facebook, LinkedIn, YouTube, and Instagram. In doing so, it sheds light on the interrelations between e-government adoption, social media deployment, and sophistication of use from a local government perspective. Furthermore we identify determinants for the types of social media usage by means of a stages of an e-government model consisting of three phases. We find that more densely populated municipalities with a larger and a higher-educated population use their Twitter account significantly different from their counterparts.
    Keywords: social media; municipalities; E-government; usage of Twitter-account
    JEL: D85
    Date: 2019–01–09
  21. By: Dominik Gutt (Paderborn University)
    Abstract: The growing body of literature on online ratings has reached a consensus of the positive impact of the average rating and the number of ratings on economic outcomes. Yet, little is known about the economic implication of the online rating variance, and existing studies have presented contradictory results. Therefore, this study examines the impact of the online rating variance on the prices and sales of digital cameras from The key feature of our study is that we employ and validate a machine learning approach to decompose the online rating variance into a product failure-related and taste-related share. In line with our theoretical foundation, our empirical results highlight that the failure-related variance share has a negative impact on price and sales, while the impact of the taste-related share is positive. Our results highlight a new perspective on the online rating variance that has been largely neglected by prior studies. Sellers can benefit from our results by adjusting their pricing strategy and improving their sales forecasts. Review platforms can facilitate the identification of product failure-related ratings to support the purchasing decision process of customers.
    Keywords: Online Rating Variance, Text Mining, Econometrics, User-Generated Social Media.
    JEL: M15 M31 O32 D12
    Date: 2018–12
  22. By: G. Gulsun Akin (Bogazici University); Ahmet Faruk Aysan; Ezgi Özer; Levent Yildiran
    Abstract: Using a discrete choice random utility model and unique data from a nationwide consumer survey, we show that consumers view credit cards as highly differentiated products with both bank-level and card-level nonprice features. They select their credit cards by predominantly considering these nonprice features. Although they charge higher prices, the majority of consumers choose private banks as issuers due to their bank-level and card-level nonprice benefits. Consumers who prioritize prices tend to choose participation or public banks. Product differentiation and bundling seem to underlie banks’ market power in the Turkish credit card market. Large private banks and public banks reap the benefits of bundling more than the other banks. Of card-level nonprice features, installments, bonuses/rewards/miles, and the prestige of the card seem to be particularly effective in consumers’ decisions. We argue that this highly differentiated nature of credit cards can be an alternative explanation for the credit card pricing puzzles.
    Date: 2018–11–19
  23. By: Pavel Ciaian; d'Artis Kancs; Miroslava Rajcaniova
    Abstract: This is the first paper that estimates the price determinants of BitCoin in a Generalised Autoregressive Conditional Heteroscedasticity framework using high frequency data. Derived from a theoretical model, we estimate BitCoin transaction demand and speculative demand equations in a GARCH framework using hourly data for the period 2013-2018. In line with the theoretical model, our empirical results confirm that both the BitCoin transaction demand and speculative demand have a statistically significant impact on the BitCoin price formation. The BitCoin price responds negatively to the BitCoin velocity, whereas positive shocks to the BitCoin stock, interest rate and the size of the BitCoin economy exercise an upward pressure on the BitCoin price.
    Date: 2018–12
  24. By: Brainard, Lael (Board of Governors of the Federal Reserve System (U.S.))
    Date: 2018–11–13
  25. By: Zura Kakushadze
    Abstract: We propose factor models for the cross-section of daily cryptoasset returns and provide source code for data downloads, computing risk factors and backtesting them out-of-sample. In "cryptoassets" we include all cryptocurrencies and a host of various other digital assets (coins and tokens) for which exchange market data is available. Based on our empirical analysis, we identify the leading factor that appears to strongly contribute into daily cryptoasset returns. Our results suggest that cross-sectional statistical arbitrage trading may be possible for cryptoassets subject to efficient executions and shorting.
    Date: 2018–11
  26. By: Kim, Dokyung; Kim, Seongcheol
    Abstract: This study focused on the environmental sustainability of the mobile communications industry (MCI). Environmental sustainability in MCI can affect not only corporates in the sector but also other industries by providing solutions to cope with environmental issues. Despite the significance of environmental sustainability in MCI, there has been lack of attention from prior researchers. This study investigated the environmental issues in MCI within the integrated and holistic approach to corporate sustainable management (CSM). In addition, the environmental management (EM) of mobile network operators (MNOs) was analyzed into the framework of the institutional theory. To investigate the environmental management (EM) of mobile network operators (MNOs), we carried out a case study on three Korean mobile communications companies (SK Telecom, KT, and LG Uplus). The result of this study showed that, in terms of environmental issues, economic and environmental issues were mostly found in the MCI, and the mobile communications firms have actively coped with the issues. The MNOs' EM was relatively active, and it was confirmed that regulatory, mimetic and normative mechanisms were working simultaneously. The results of this study would provide some meaningful implications for practitioners as well as policymakers.
    Keywords: Corporate sustainable management,Environmental sustainability,Environmental management,Environmental issues,Institutional theory,Mobile communications industry,Mobile network operators
    Date: 2018
  27. By: Szabolcs Nagy
    Abstract: E-commerce is on the rise in Hungary, with significantly growing numbers of customers shopping online. This paper aims to identify the direct and indirect drivers of the double-digit growth rate, including the related macroeconomic indicators and the Digital Economy and Society Index (DESI). Moreover, this study provides a deep insight into industry trends and outlooks, including high industry concentration and top industrial players. It also draws the profile of the typical online shopper and the dominant characteristics of online purchases. Development of e-commerce is robust, but there is still plenty of potential for growth and progress in Hungary.
    Date: 2018–12
  28. By: Yagna Patel
    Abstract: In this paper, reinforcement learning is applied to the problem of optimizing market making. A multi-agent reinforcement learning framework is used to optimally place limit orders that lead to successful trades. The framework consists of two agents. The macro-agent optimizes on making the decision to buy, sell, or hold an asset. The micro-agent optimizes on placing limit orders within the limit order book. For the context of this paper, the proposed framework is applied and studied on the Bitcoin cryptocurrency market. The goal of this paper is to show that reinforcement learning is a viable strategy that can be applied to complex problems (with complex environments) such as market making.
    Date: 2018–12
  29. By: Dominik Gutt (Paderborn University); Philipp Herrmann (Consultant); Mohammad S. Rahman (Purdue University)
    Abstract: In this paper, we analyze how changes in local market structure affect the properties of a market’s mean rating distribution. To this end, we combine demographic, socioeconomic, and Yelp restaurant review data for 372 isolated markets in the United States. Our empirical estimates demonstrate that an increase in overall competition – measured as total number of businesses in a market – leads to a broader range and to a decrease in the average of a market’s mean rating distribution. The implication is that a larger market has proportionately more lower rated restaurants, whereas higher rated restaurants have relatively fewer comparable substitutes and face less competition in such a market. These effects are particularly pronounced when the analysis is limited to specific cuisine types where vertical differentiation is more natural or when we control for city-specific unobserved heterogeneity. Our findings highlight that practitioners and scholars using online mean ratings of businesses from disparate markets should account for the local market structure to judiciously analyze the relative market power of a business.
    Keywords: Local Market Competition, Online Ratings, Online Offline Interplay, Geographic
    JEL: D43 D22 L11 M31
    Date: 2018–12
  30. By: Shishikura, Manabu; Kasuga, Norihiro; Nakamura, Akihiro
    Abstract: In this paper, we measure users' disutility from advertisements accompanying movies supplied by media based on the results gathered through our own survey questionnaire. First, we confirmed the importance of measuring the disutility of advertisements based on the theoretical economic model developed from previous research. Through this work, we explicitly show the following: The advertisement volume supplied by media does not necessarily coincide with the socially optimal ad volume because media do not fully consider disutility from advertising. The equilibrium in ad volume is different depending on the supply method. Whether the volume of ads becomes too small or excessive will change depending on the magnitude of their disutility. Subsequently, we measure the extent to which users intend to pay for ad avoidance based on our original data. As a result, we evaluate disutility on a monetary basis, showing that disutility differs depending on the type of ad.
    Date: 2018
  31. By: Lee, Paul S. N.
    Abstract: This study examines the factors contributing to the success of startups in attaining a unicorn status by comparing three successful companies, namely, WeLab, SenseTime, and GoGoVan. We investigate the development of these startups and the various stages of their growth, with a focus on the success factors for getting continuing funding from various sources. We found that a competitive business model of a startup is a first factor to nurture a unicorn. The second factor is the executive power of the founder(s). Almost without exception, there are ups and downs of running a startup, which highlights the importance of leadership. The founders do not need only vision and passion, but soft skills in managing the business and attracting financial support as well. We also found that all three startups have a "China" element. The attractiveness to Chinese market and capital seems to be a must for Hong Kong unicorn to come into shape. Interestingly, profit is not that important a factor for a startup to become a unicorn. Very often, investors buy on the potential of the startup rather than immediate profit. The four factors, namely, competitiveness, executive power of founder(s), attractiveness to Chinese market and capital, and future potential have proved to be important for a startup to succeed in Hong Kong. At the end of the paper, we discuss three different models of running a successful startup. It ranges from facilitating financial loans, using innovative AI technology to solve specific problems, to providing a one-stop e-commerce platform. We anticipate that more startups will succeed in Hong Kong since the unicorns have thrown light on the path which latecomers can follow.
    Date: 2018
  32. By: Chang, Seoyon; Kim, Seongcheol
    Abstract: The attention towards Multi-Channel Networks (MCNs) is notable in the media sector. Many firms adopt MCN business to capture the potential value created by new media trend. Consequently, the new investment, merger and acquisition (M&A), and in-house establishment trend is shaking up the media market. However, the short history of MCNs is yet reflected in the academia. Especially, there is limited literature on the industry-level analysis of MCNs. To fill the gap, this research attempts to understand how the firms are participating in the MCN industry across time, sectors, and regions. In other words, the firms' corporate strategies on the MCN adoption are analyzed. This paper classifies the type of strategic decision by Make, Buy, and Ally, then evaluates the influence of three strategic decisions on firm performance. It further investigates whether a first mover advantage exists in the MCN industry. To examine the firm performance, two accounting-based measures are employed: return on asset (ROA) and Tobin's Q. Research results indicate that Make leads better firm performance than Buy and Ally. In addition, the first mover advantage is confirmed in the MCN industry. Besides, some descriptive analyses of the MCN industry are presented in the study. As preliminary research examining the firms' corporate strategy on the adoption of MCN business, this paper provides meaningful implications for both practitioner and academia.
    Keywords: Multi-Channel Network (MCN),Corporate strategy,Strategic alliance,Merger and acquisition (M&A),In-house establishment,First mover advantage,Firm performance,Return on assets (ROA),Tobin's Q
    Date: 2018
  33. By: Jürgen Neumann (Paderborn University); Dominik Gutt (Paderborn University); Dennis Kundisch (Paderborn University)
    Abstract: Optimal price setting in peer-to-peer markets featuring online ratings requires incorporating interactions between prices and ratings. Additionally, recent literature reports that online ratings in peer-to-peer markets tend to be inflated overall, undermining the reliability of online ratings as a quality signal. This study proposes a two-period model for optimal price setting that takes (potentially inflated) ratings into account. Our theoretical findings suggest that sellers in the medium-quality segment have an incentive to lower first-period prices to monetize on increased second-period ratings. The possibility of monetizing on second-period ratings depends on the buyers’ assessment of the rating system’s reliability. Additionally, we find that total profits and prices increase with online ratings and additional quality signals. Empirically, conducting Difference-in-Difference regressions on a comprehensive panel data set from Airbnb, we can validate that price increases are associated with lower ratings, and we find empirical support for the prediction that additional quality signals increase prices. Our work comes with substantial implications for sellers in peer-to-peer markets looking for an optimal price setting strategy.
    Keywords: Sharing Economy, Online Ratings, Optimal Price Setting, DiD-Regression.
    JEL: M15 M31 O32 D12
    Date: 2018–12
  34. By: Cristina Giorgiantonio (Bank of Italy); Lucia Rizzica (Bank of Italy)
    Abstract: The use of online platforms as intermediaries between the demand for and supply of labour has grown in recent years, both in Italy and abroad. We analyse this phenomenon by providing, in particular: i) an overview of the current debate on how to regulate this sector, specifically with respect to the contractual arrangements and the set of protections to be guaranteed to the workers; ii) a review of the existing empirical evidence concerning the extent of the phenomenon and its main characteristics, both in Italy and abroad; and iii) a case study on the food delivery industry in Italy, with an analysis of the individual characteristics and careers of the delivery operators involved.
    Keywords: gig economy, labour markets regulation
    JEL: J3 J42
    Date: 2018–12
  35. By: Kwon, Hyeseon; Kim, Seongcheol
    Abstract: Commercial drone is one of the most promising businesses in IoT industry. However, even if we classify domestic commercial drones market roughly, it still is a broad field since there are diverse domains such as delivery service, media, assessment‧business monitoring, agriculture, vehicles, sports‧healthcare, and education. In order to promote domestic commercial drone market, this study will try to discover which domain will be the killer. Therefore, this study sheds light on the emerging commercial drone market in Korea. In order to proliferate the commercial drone market in Korea, this study proposes an AHP model for assessing the killer business domain for drones which consists of 9 technology, market, and policy factors. The model was applied to assess and compare the prospect of three drone business domain; media drone, assessment‧business monitoring drone, and entertainment drone. By inviting the perception of 39 drone experts, the results showed that assessment‧business monitoring drone is the most promising drone in Korea.
    Keywords: commercial drone,Unmanned Aerial Vehicle(UAV),Analytic Hierarchy Process(AHP)
    Date: 2018
  36. By: Charu Grover (Jawaharlal Nehru University); Sangeeta Bansal (Jawaharlal Nehru University); Adan L. Martinez-Cruz (Centro de Investigacion y Docencia Economicas, Mexico and ETH-Zurich, Switzerland)
  37. By: Shaw, Charles
    Abstract: In a recent contribution to the financial econometrics literature, Chu et al. (2017) provide the first examination of the time-series price behaviour of the most popular cryptocurrencies. However, insufficient attention was paid to correctly diagnosing the distribution of GARCH innovations. When these data issues are controlled for, their results lack robustness and may lead to either underestimation or overestimation of future risks. The main aim of this paper therefore is to provide an improved econometric specification. Particular attention is paid to correctly diagnosing the distribution of GARCH innovations by means of Kolmogorov type non-parametric tests and Khmaladze's martingale transformation. Numerical computation is carried out by implementing a Gauss-Kronrod quadrature. Parameters of GARCH models are estimated using maximum likelihood. For calculating P-values, the parametric bootstrap method is used. Further reference is made to the merits and demerits of statistical techniques presented in the related and recently published literature.
    Keywords: Autoregressive conditional heteroskedasticity (ARCH), generalized autoregressive conditional heteroskedasticity (GARCH), market volatility, nonlinear time series, Khmaladze transform.
    JEL: C22 C58
    Date: 2018–11–01
  38. By: Hwang, ShinYoung
    Abstract: Voice-enabled smart devices are poised to become the next new thing as it provides convenience in fulfilling users' instant needs. The ability to provide information, control home systems, and manage daily schedules has made smart speakers become the new gateway to users' personal spaces. The current smart speaker market however is dominated by IT or media firms instead of traditional audio manufacturers. By using its strong user base and existing array of services, smart speakers are perceived as a new opportunity to lock-in users to the service provider's platform. This study examines the extent to which consumer satisfaction with the smart speaker influences continuous usage intentions and most importantly, loyalty toward the smart speaker provider. Satisfaction is measured based on the system and information quality of the smart speaker. The empirical findings are drawn from 326 smart speaker users in Korea. The study finds that user satisfaction is an important asset that influences users' future intentions in using the smart speaker and remaining loyal to the service provider. As the smart speaker market becomes competitive, the race to lock-in users can be made through comprehensive approaches to developing the information and system quality of smart speakers.
    Date: 2018
  39. By: Falch, Morten; Henten, Anders
    Abstract: This paper examines the impact of substitution of postal services with electronic communications and how this challenges the possibilities to maintain ubiquitous postal services with universal coverage. Denmark is used as an example, as this is one of the leading countries with regard to implementation of substitution of postal services with electronic communications. Postal service is a public utility like telecom, electricity, railways etc., and the postal sector has been subject to the same kind of market reforms, as those seen within other public utility sectors. These include the introduction of more competition and privatization. Within the EU, the guidelines for such reforms were formulated in the Green Paper on postal services (EU, 1991) From an institutional point of view, postal and telecom services have been closely related, as they have been part of the same public entity (the former PTTs). The first step in the telecom reform was in many countries to separate postal and telecom services, as telecom was considered better suited to be provided on market-based conditions, and to avoid cross subsidization from telecom to postal services. However, the point of departure for the two sectors is very different. While telecom in general is a profitable business, public subsidies have been necessary to ensure the provision of postal services. In addition, the basic service of letter distribution is challenged by digital alternatives...
    Date: 2018
  40. By: Mohamed Oubenal (Institut Royal de la Culture AmazigheAuthor-Name: Houda Ben Hamouda)
    Abstract: When the Tunisian government seized the assets of the Ben Ali clan in 2011, prosperous companies were sold to some fractions of the business elite which started adopting a strategy of direct intervention in the political sphere to consolidate their resources and find new opportunities. In order to study the position of business elites in Tunisia we use a methodology combining a social network analysis (SNA) of the board of directors of Tunisian listed companies and a qualitative history of its political economy. We shed light on the regional identities of some family groups and the centrality of financial institutions such as insurance companies. The financial sector is dominated by the State, but some Djerbian families occupy important positions. Sfaxian entrepreneurs are organized in clusters that control certain large industrial enterprises.
    Date: 2018–12–19

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