nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2020‒07‒20
25 papers chosen by

  1. Predicting cell phone adoption metrics using satellite imagery By Edward J. Oughton; Jatin Mathur
  2. Contesting digital finance for the poor By Ozili, Peterson K
  3. Casting Light on Central Bank Digital Currencies By Tommaso Mancini Griffoli; Maria Soledad Martinez Peria; Itai Agur; Anil Ari; John Kiff; Adina Popescu; Celine Rochon
  4. Please Do Not Censor This – Why I Left ResearchGate, Zenodo, OSF, LinkedIn, and YouTube By Miguel Abambres
  5. International Connectivity and the Digital Divide in Sub-Saharan Africa By Joel Cariolle
  6. Fintech and Payments Regulation: Analytical Framework By Tanai Khiaonarong; Terry Goh
  7. It's Not Only Size That Matters: Determinants of Estonia's E-Governance Success By Stephany, Fabian
  8. On the diffusion of mobile phone innovations for financial inclusion By Simplice A. Asongu; Nicholas Biekpe; Danny Cassimon
  9. Can Digitalization Help Deter Corruption in Africa? By Rasmané Ouedraogo; Amadou N Sy
  10. Online Commerce, Inter-Regional Retail Trade, and the Evolution of Gravity Effects: Evidence from 20 Billion Transactions By David Bounie; Youssouf Camara; John Galbraith
  11. Tec(h)tonic Shifts: Taxing the “Digital Economy” By Aqib Aslam; Alpa Shah
  12. Gender, Technology, and the Future of Work By Mariya Brussevich; Era Dabla-Norris; Christine Kamunge; Pooja Karnane; Salma Khalid; Kalpana Kochhar
  13. Remittances, the Diffusion of Information and Industrialisation in Africa By Asongu, Simplice; Odhiambo, Nicholas
  14. Estimating investments in General Purpose Technologies. The case of AI Investments in Europe By Daniel Nepelski; Maciej Sobolewski
  15. Central Bank Digital Currency: Central Banking For All? By Fernández-Villaverde, Jesús; Sanches, Daniel; Schilling, Linda Marlene; Uhlig, Harald
  16. Drivers of Financial Access: the Role of Macroprudential Policies By Corinne Deléchat; Lama Kiyasseh; Margaux MacDonald; Rui Xu
  17. COVID-19 response needs to broaden financial inclusion to curb the rise in poverty By Mostak Ahamed; Roxana Guti\'errez-Romero
  18. Consumer Debt and Default: A Macroeconomic Perspective By Exler, Florian; Tertilt, Michèle
  19. Digitalisation and (de)centralisation in Germany - a comparative study of retail banking and the energy sector By Flögel, Franz; Beckamp, Marius
  20. Measuring the Impact of a Failing Participant in Payment Systems By Ronald Heijmans; Froukelien Wendt
  21. Mitigating Bias in Online Microfinance Platforms: A Case Study on By Soumajyoti Sarkar; Hamidreza Alvari
  22. Dynamics of fintech terms in news and blogs and specialization of companies of the fintech industry By Fabio Ciulla; Rosario N. Mantegna
  23. Terrorism and social media: global evidence By Asongu, Simplice; Orim, Stella-Maris; Nting, Rexon
  24. Toward a discursive approach to growth models: Social blocs in the politics of digital transformation By Rothstein, Sidney A.
  25. Optimal financial inclusion By Ozili, Peterson K

  1. By: Edward J. Oughton; Jatin Mathur
    Abstract: Approximately half of the global population does not have access to the internet, even though digital access can reduce poverty by revolutionizing economic development opportunities. Due to a lack of data, Mobile Network Operators (MNOs), governments and other digital ecosystem actors struggle to effectively determine if telecommunication investments are viable, especially in greenfield areas where demand is unknown. This leads to a lack of investment in network infrastructure, resulting in a phenomenon commonly referred to as the 'digital divide'. In this paper we present a method that uses publicly available satellite imagery to predict telecoms demand metrics, including cell phone adoption and spending on mobile services, and apply the method to Malawi and Ethiopia. A predictive machine learning approach can capture up to 40% of data variance, compared to existing approaches which only explain up to 20% of the data variance. The method is a starting point for developing more sophisticated predictive models of telecom infrastructure demand using publicly available satellite imagery and image recognition techniques. The evidence produced can help to better inform investment and policy decisions which aim to reduce the digital divide.
    Date: 2020–06
  2. By: Ozili, Peterson K
    Abstract: This article critically examines digital finance as a pro-poor private sector intervention for international development. It examines the turn from ‘microfinance for the poor’ to ‘digital finance for the poor’. It then considers three key issues, and contest the argument that digital finance is pro-poor. Notably, proponents argue that digital finance can improve development outcomes, but this is based on weak economic logic; secondly, proponents argue that digital finance for the poor is good business - this claim is very weak because evidence suggest that digital finance is good business only with government support. The article further argues that digital finance for the poor will expose the poorest to multiple risks in the financial sector. Therefore, digital finance for the poor should be a contested enterprise.
    Keywords: digital finance, microfinance, financial inclusion, financial development, financial innovation, poor people, financial technology, blockchain, fintech, regtech, sandbox, access to finance, financial services
    JEL: O1 O12 O3 R2
    Date: 2020
  3. By: Tommaso Mancini Griffoli; Maria Soledad Martinez Peria; Itai Agur; Anil Ari; John Kiff; Adina Popescu; Celine Rochon
    Abstract: Digitalization is reshaping economic activity, shrinking the role of cash, and spurring new digital forms of money. Central banks have been pondering wheter and how to adapt. One possibility is central bank digital currency (CBDC)-- a widely accessible digital form of fiat money that could be legal tender. This discussion note proposes a conceptual framework to assess the case for CBDC adoption from the perspective of users and central banks. It discusses possible CBDC designs, and explores potential benefits and costs, with a focus on the impact on monetary policy, financial stability, and integrity. This note also surveys research and pilot studies on CBDC by central banks around the world.
    Keywords: Money;Central banking;Currencies;Monetary policy;Central banks;Bank rates;Bank liquidity;Lender of last resort;Bank accounting;Central Bank Digital Currencies,financial integrity,central bank,token-based,intermediation,bank deposit
    Date: 2018–11–12
  4. By: Miguel Abambres (Num3ros)
    Abstract: This work exposes what recently and suddenly (i.e., without prior warning) happened to some of my scholarly publications / accounts in some of the most popular content-sharing platforms, such as (i) ResearchGate (aka the FACEBOOK for scientists – you can imagine all the cons), (ii) Zenodo (owned by CERN), (iii) Open Science Framework or OSF (owned by the Center for Open Science), (iv) LinkedIn (owned by Microsoft), and (v) YouTube (a Google subsidiary). All these digital platforms have some in common – they are centralized, i.e. controlled by a single entity, which makes it easier to destroy freedom of speech. Opinion / review papers by myself and co-authors disappeared from some platforms, own accounts were blocked, and also other kinds of censorship (my definition of it) might have occurred, all throughout the second semester of 2019. In this eprint I provide my judgements about it and evidence (webpage archives) of each denounced fact. Lastly, I present my advice for those who are sick to death of feeding big companie$ and wanna take part in the next digital revolution.
    Keywords: Big Money,Academic Freedom,Big Tech,Freedom of Speech,Censorship,Centralized Platforms,Decentralized Platforms,P2P,Blockchain,Social Networks,Academia,Higher Education,Scholarly Publications,Scientific Publishing,Academic Publishing,Academic Repositories,ResearchGate,Zenodo,OSF,LinkedIn,YouTube,Sustainability,Whistleblowing,Academic Publications,Scientific Publications
    Date: 2020–06–02
  5. By: Joel Cariolle (FERDI - Fondation pour les Etudes et Recherches sur le Développement International)
    Abstract: During the last decades, international connectivity has improved significantly with the worldwide deployment of some 400 fiber submarine cables (SMCs), transmitting more than 99% of international telecommunications. If sub-Saharan African (SSA) has long remained excluded from this interconnection process, the maritime infrastructure network has recently densified and spurred African connectivity catch-up. This paper estimates the impact of SMC deployment on the digital divide in an original sample of 49 SSA countries covering the period 1990-2014. Diff-in-diff (DID) estimations are conducted and highlight the particular contribution of SEACOM and EASSy cables, laid in 2009-2010, to Internet penetration in Eastern and Southern Africa. According to DID estimates these SMCs rollout has yielded a 3-5 percentage-point increase in internet penetration rates in this region compared to the rest of the continent. Triple-difference estimations emphasize conditional factors under which these cables have fostered Internet uptake: enlarged Internet bandwidth per users, lower broadband Internet tariffs, higher investment in the mobile network, improved terrestrial connectivity, and electricity access.
    Keywords: ICT,submarine cables,digital divide,Sub-Saharan Africa,infrastructure,connectivity
    Date: 2020–03–18
  6. By: Tanai Khiaonarong; Terry Goh
    Abstract: Financial technology (Fintech) has prompted authorities to consider their potential financial stability benefits, risks, and effective regulation. Recent developments suggest that regulatory approaches and their legal foundations need to augment entity-based regulation with increasing focus on activities and risks as market structure changes. This paper draws on recent international experiences in modernizing legal and regulatory frameworks for payment services. An analytical framework based on a four-step process is proposed—(i) identifying payment activities; (ii) licensing entities and designating systems; (iii) analyzing and managing risks, and (iv) promoting legal certainty. As payment activities evolve and potential systemic risks heighten, adherence to international standards and additional regulatory requirements should be warranted.
    Date: 2020–05–29
  7. By: Stephany, Fabian
    Abstract: User data fuel the digital economy, while individual privacy is at stake. Governments react differently to this challenge. Estonia, a small Baltic state, has become a role model for the renewal of the social contract in times of big data. While e-governance usage has been growing in many parts of Europe during the last ten years, some regions are lagging behind. The Estonian example suggests that online governance is most accepted in a small state, with a young population, trustworthy institutions and the need of technological renewal. This work examines the development of e-governance usage (citizens interacting digitally with the government) during the last decade in Europe from a comprehensive cross-country perspective: Size, age and trust are relevant for the usage of digital government services in Europe. However, the quality of past communication infrastructure is not related to e-governance popularity.
    Date: 2020–05–12
  8. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas Biekpe (Cape Town, South Africa); Danny Cassimon (University of Antwerp, Belgium)
    Abstract: “Replications are an important part of the research process because they allow for greater confidence in the findings†(McEwan, Carpenter & Westerman, 2018, p. 235). This study extends Lashitew, van Tulder and Liasse (2019, RP) by addressing the concern of multicollinearity that affects the signs and significance of estimated coefficients. This article investigates nexuses between innovations in mobile money and financial inclusion in developing countries. Demand and supply factors that affect the diffusion of mobile services as well as macro-level institutional and economic factors are taken on board. The empirical evidence is based on Tobit regressions. The study finds that when the empirical analysis is robust to multicollinearity, two main tendencies are apparent: the significant findings of Lashitew et al. (2019) are confirmed and many new significant estimated coefficients emerge. While this study confirms the findings of the underlying research, it also goes further to improve the harmony in narratives between the predictors and the outcome variables. Accordingly, by accounting for multicollinearity, the earlier findings are now more consistent across the set of predictors (i.e. demand and supply factors) and the attendant financial inclusion outcomes (i.e. mobile money accounts, mobile used to send money and mobile used to receive money).
    Keywords: Mobile money; technology diffusion; financial inclusion; inclusive innovation
    JEL: D10 D14 D31 D60 O30
    Date: 2020–03
  9. By: Rasmané Ouedraogo; Amadou N Sy
    Abstract: This paper studies the effect of digitalization on the perception of corruption and trust in tax officials in Africa. Using individual-level data from Afrobarometer surveys and several indices of digitalization, we find that an increase in digital adoption is associated with a reduction in the perception of corruption and an increase in trust in tax officials. Exploiting the exogeneous deployment of submarine cables at the local level, the paper provides evidence of a negative impact of the use of Internet on the perception of corruption. Yet, the paper shows that the dampening effect of digitalization on corruption is hindered in countries where the government has a pattern of intentionally shutting down the Internet, while countries that successfully promote information and communication technology (ICT) enjoy a more amplified effect.
    Date: 2020–05–29
  10. By: David Bounie (IP Paris - Institut Polytechnique de Paris, ECOGE - Economie Gestion - I3, une unité mixte de recherche CNRS (UMR 9217) - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique - X - École polytechnique - Télécom ParisTech - MINES ParisTech - École nationale supérieure des mines de Paris, SES - Département Sciences Economiques et Sociales - Télécom ParisTech); Youssouf Camara; John Galbraith
    Abstract: This paper investigates interregional retail trade linkages, and changes in the gravity effects between cities and regions arising from online commerce, as opposed to traditional point-of-sale commerce. We build original interregional retail trade measures from nearly 20 billion domestic consumer online and in-store transactions made through bank cards, in France 2018-19. We are able to study the mobility of individual bank card holders throughout France, their on-site purchases, and also the locations from which their online purchases were made. We find evidence that online consumer expenditure tends to be more heavily concentrated in the already-large regional economies. This result suggests that the increasing movement toward online purchasing may tend to increase the concentration of overall economic activity, and may have important implications for regional economic development.
    Keywords: Consumption expenditure,Consumer mobility,Gravity model,Inter-regional trade,E-commerce
    Date: 2020–06–11
  11. By: Aqib Aslam; Alpa Shah
    Abstract: The ever-increasing digitalization of businesses has accelerated the need to address the many shortcomings and unresolved issues within the international corporate income tax system. In particular, the customer or “user”—through their online activities—is now considered by many as being a critical driving force behind the value of digital services. Furthermore, the rapid growth of digital service providers over the last decade has made them an increasingly popular target for special taxes—similar to wealth and solidarity taxes—which can also help mobilize much-needed revenues in the wake of a crisis. This paper argues that a plausible conceptual case can be made to tax the value generated by users under the corporate income tax. However, a number of issues need to be tackled for user-based tax measures to become a reality, which include agreement among countries on whether user value justifies a reallocation of taxing rights, establishing the legal right to tax income derived from user value, as well as an appropriate metric for valuing user-generated data if it is ever to be used as a tax base. Furthermore, attempting to tax only certain types of business is ill-advised, especially as user data is now being exploited widely enough for it to be recognized as an input for almost all businesses. Several options present themselves for consideration—from a modified permanent establishment definition combined with taxation by formulary apportionment, to user-based royalty-type taxes—each with their own merits and misdemeanors.
    Date: 2020–05–29
  12. By: Mariya Brussevich; Era Dabla-Norris; Christine Kamunge; Pooja Karnane; Salma Khalid; Kalpana Kochhar
    Abstract: New technologies?digitalization, artificial intelligence, and machine learning?are changing the way work gets done at an unprecedented rate. Helping people adapt to a fast-changing world of work and ameliorating its deleterious impacts will be the defining challenge of our time. What are the gender implications of this changing nature of work? How vulnerable are women’s jobs to risk of displacement by technology? What policies are needed to ensure that technological change supports a closing, and not a widening, of gender gaps? This SDN finds that women, on average, perform more routine tasks than men across all sectors and occupations?tasks that are most prone to automation. Given the current state of technology, we estimate that 26 million female jobs in 30 countries (28 OECD member countries, Cyprus, and Singapore) are at a high risk of being displaced by technology (i.e., facing higher than 70 percent likelihood of being automated) within the next two decades. Female workers face a higher risk of automation compared to male workers (11 percent of the female workforce, relative to 9 percent of the male workforce), albeit with significant heterogeneity across sectors and countries. Less well-educated and older female workers (aged 40 and above), as well as those in low-skill clerical, service, and sales positions are disproportionately exposed to automation. Extrapolating our results, we find that around 180 million female jobs are at high risk of being displaced globally. Policies are needed to endow women with required skills; close gender gaps in leadership positions; bridge digital gender divide (as ongoing digital transformation could confer greater flexibility in work, benefiting women); ease transitions for older and low-skilled female workers.
    Keywords: Information technology;Technological innovation;Labor force participation;Gender equality;Gender;Automation, Technological Change, Jobs, Female Labor Force, Occupational Choice, Gender Equality
    Date: 2018–10–08
  13. By: Asongu, Simplice; Odhiambo, Nicholas
    Abstract: This study examines the role of information and communication technology (ICT) on remittances for industrialisation in a panel of 49 African countries for the period 1980-2014. The empirical evidence is based on three simultaneity-robust estimation techniques, namely: (i) Instrumental Fixed Effects (FE) in order to control for the unobserved heterogeneity; (ii) Generalised Method of Moments (GMM) to account for persistence in industrialisation; and (iii) Instrumental Quantile Regressions (QR) to control for initial levels of industrialisation. Our best estimators are from FE and QR estimations because the GMM regression outputs largely fail post-estimation diagnostic tests. The following findings are established: (i) There are positive marginal effects from the interaction between remittances and ICT in the FE regressions whereas there are negative marginal impacts from the interaction between remittances and ICT; (ii) Interactions between remittances and mobile phone penetration are positive in the bottom and 90th quantiles whereas the interaction between internet penetration and remittances is positive in the bottom and top quantiles of the industrialisation distribution. Overall, the role of ICT in remittances for industrialisation is much more apparent when existing levels of industrialisation are accounted for. The findings contribute to the debates on the importance of external flows and information infrastructure in economic growth as well as the relevance of remittances in driving economic development in environments where institutions are weak. The value of the study to scholars and policy makers also builds on the fact that the potential for ICT and remittances in Africa can be leveraged to address development challenges on the continent such as the low level of industrialisation.
    Keywords: Remittances; Industrialisation; ICT; Africa
    JEL: F24 F43 F63 O30 O55
    Date: 2019–01
  14. By: Daniel Nepelski (European Commission - JRC); Maciej Sobolewski (European Commission - JRC)
    Abstract: In spite of a large interest in General Purpose Technologies, it is unclear how much economies invest in their development and diffusion. For example, various sources provide various figures of investments in Artificial Intelligence (AI). This constantly blurs the understanding of the AI-driven revolution among policy makers and business leaders and constraints informed decision making. The current report presents an original and comprehensive methodology to estimate AI investments. It rests on three assumptions: First, it considers AI as a general-purpose technology (GPT). Second, it includes not only investments in the core AI technology, but in complementary assets and capabilities necessary for its adoption. Finally, the methodology recognises different roles that the public and private sectors play in the process of AI creation and implementation. Using this approach, AI investments in Europe are estimated.
    Keywords: General Purpose Technology, GPT, Artificial Intelligence, AI, digital technologies, investments, intangibles, Europe
    Date: 2020–05
  15. By: Fernández-Villaverde, Jesús; Sanches, Daniel; Schilling, Linda Marlene; Uhlig, Harald
    Abstract: The introduction of a central bank digital currency (CBDC) allows the central bank to engage in large-scale intermediation by competing with private financial intermediaries for deposits. Yet, since a central bank is not an investment expert, it cannot invest in long-term projects itself, but relies on investment banks to do so. We derive an equivalence result that shows that absent a banking panic, the set of allocations achieved with private financial intermediation will also be achieved with a CBDC. During a panic, however, we show that the rigidity of the central bank's contract with the investment banks has the capacity to deter runs. Thus, the central bank is more stable than the commercial banking sector. Depositors internalize this feature ex-ante, and the central bank arises as a deposit monopolist, attracting all deposits away from the commercial banking sector. This monopoly might endangered maturity transformation.
    Keywords: bank runs; Central bank digital currency; central banking; intermediation; lender of last resort; maturity transformation
    JEL: E58 G21
    Date: 2020–01
  16. By: Corinne Deléchat; Lama Kiyasseh; Margaux MacDonald; Rui Xu
    Abstract: This study analyzes the drivers of the use of formal vs. informal financial services in emerging and developing countries using the 2017 Global FINDEX data. In particular, we investigate whether individuals’ choice of financial services correlates with macro-financial and macro-structural policies and conditions, in addition to individual and country characteristics. We start our analysis on middle and low-income countries, and then zoom in on sub-Saharan Africa, currently the region that most relies on informal financial services, and which has the largest uptake of mobile banking. We find robust evidence of an association between macroprudential policies and individuals’ choice of financial access after controlling for personal and country-level characteristics. In particular, macroprudential policies aimed at controlling credit supply seem to be associated with greater resort to informal financial services compared with formal, bank-based access. This highlights the importance for central bankers and financial sector regulators to consider the potential spillovers of monetary policy and financial stability measures on financial inclusion.
    Date: 2020–05–29
  17. By: Mostak Ahamed; Roxana Guti\'errez-Romero
    Abstract: The ongoing COVID-19 pandemic risks wiping out years of progress made in reducing global poverty. In this paper, we explore to what extent financial inclusion could help mitigate the increase in poverty using cross-country data across 78 low- and lower-middle-income countries. Unlike other recent cross-country studies, we show that financial inclusion is a key driver of poverty reduction in these countries. This effect is not direct, but indirect, by mitigating the detrimental effect that inequality has on poverty. Our findings are consistent across all the different measures of poverty used. Our forecasts suggest that the world's population living on less than $1.90 per day could increase from 8% to 14% by 2021, pushing nearly 400 million people into poverty. However, urgent improvements in financial inclusion could substantially reduce the impact on poverty.
    Date: 2020–06
  18. By: Exler, Florian; Tertilt, Michèle
    Abstract: In this survey, we review the quantitative macroeconomic literature analyzing consumer debt and default. We start by providing an overview of consumer bankruptcy law in the US and document the relevant institutional changes over time. We proceed with a comprehensive empirical section, describing key facts about consumer debt, defaults and delinquencies, as well as charge-off and interest rates for the United States. In addition to the evolution of these variables over time, we construct life-cycle profiles using data from the Survey of Consumer Finances and show that debt and defaults display a clear hump-shaped profile by age. Third, we show how credit card debt has evolved along the income distribution. Finally, we document a large amount of heterogeneity in credit card interest rates across consumers. In the second part of the survey, we describe what has by now become the workhorse model of consumer credit and default. We discuss a quantitative version of the model and use it to decompose the main reasons for default. We also use the model to illustrate how the details of default costs matter. The remainder of the survey then discusses the literature centered around two questions. First, what are the welfare implications of various bankruptcy laws? And second, what caused the rise in filings over time? We end with a discussion of open questions and fruitful avenues for future research.
    Keywords: bankruptcy; Chapter 7; Charge-Offs; Consumer Debt; Credit cards; default
    JEL: C60 E20 G20 O30
    Date: 2020–02
  19. By: Flögel, Franz; Beckamp, Marius
    Abstract: The paper in hand compares retail banking and the electric energy sector to investigate how digitalisation influences (de)centralisation. Structural similarities of both industries like the direct competition of large international companies (Deutsche Bank and RWE) with locale providers such as savings banks and municipal utilities (Stadtwerke) motivate this comparison. Our findings suggest that digitalisation affects (de)centralisation differently. Despite scale economies inherent to processes of digitalisation, small entities must not be on the losing side. Cooperation tends to play a key role for regional companies to profit from digitalisation. Interestingly, digitalisation of the first and second transformation affects (de)centralisation of both industries diametrically (though, it is too early for final conclusions about the second digital transformation). The geographical properties of the businesses in question (i.e. the distance dependence of soft information respectively the physical properties of electricity transmission) and (regulatory) context factors tend to influence the relationship between digitalisation and (de)centralisation. More research is needed to enhance our understanding of digitalisation on (de)centralisation of the economy. As this discussion paper indicates, sector comparisons tend to be useful to contribute to such an understanding.
    Keywords: (de)centralisation,digitalisation,energy transition,retail banking,FinTech,EnergyTech,Digital Transformation
    Date: 2020
  20. By: Ronald Heijmans; Froukelien Wendt
    Abstract: Banks and financial market infrastructures (FMIs) that are not able to fulfill their payment obligations can be a source of financial instability. This paper develops a composite risk indicator to evaluate the criticality of participants in a large value payment system network, combining liquidity risk and interconnections in one approach, and applying this to the TARGET2 payment system. Findings suggest that the most critical participants in TARGET2 are other payment systems, because of the size of underlying payment flows. Some banks may be critical, but this is mainly due to their interconnectedness with other TARGET2 participants. Central counterparties and central securities depositories are less critical. These findings can be used in financial stability analysis, and feed into central bank policies on payment system access, oversight, and crisis management.
    Date: 2020–06–05
  21. By: Soumajyoti Sarkar; Hamidreza Alvari
    Abstract: Over the last couple of decades in the lending industry, financial disintermediation has occurred on a global scale. Traditionally, even for small supply of funds, banks would act as the conduit between the funds and the borrowers. It has now been possible to overcome some of the obstacles associated with such supply of funds with the advent of online platforms like Kiva, Prosper, LendingClub. Kiva for example, works with Micro Finance Institutions (MFIs) in developing countries to build Internet profiles of borrowers with a brief biography, loan requested, loan term, and purpose. Kiva, in particular, allows lenders to fund projects in different sectors through group or individual funding. Traditional research studies have investigated various factors behind lender preferences purely from the perspective of loan attributes and only until recently have some cross-country cultural preferences been investigated. In this paper, we investigate lender perceptions of economic factors of the borrower countries in relation to their preferences towards loans associated with different sectors. We find that the influence from economic factors and loan attributes can have substantially different roles to play for different sectors in achieving faster funding. We formally investigate and quantify the hidden biases prevalent in different loan sectors using recent tools from causal inference and regression models that rely on Bayesian variable selection methods. We then extend these models to incorporate fairness constraints based on our empirical analysis and find that such models can still achieve near comparable results with respect to baseline regression models.
    Date: 2020–06
  22. By: Fabio Ciulla; Rosario N. Mantegna
    Abstract: We perform a large scale analysis of a list of fintech terms in (i) news and blogs in English language and (ii) professional descriptions of companies operating in many countries. The occurrence and co-occurrence of fintech terms and locutions shows a progressive evolution of the list of fintech terms in a compact and coherent set of terms used worldwide to describe fintech business activities. By using methods of complex networks that are specifically designed to deal with heterogeneous systems, our analysis of a large set of professional descriptions of companies shows that companies having fintech terms in their description present over-expressions of specific attributes of country, municipality, and economic sector. By using the approach of statistically validated networks, we detect geographical and economic over-expressions of a set of companies related to the multi-industry, geographically and economically distributed fintech movement.
    Date: 2020–07
  23. By: Asongu, Simplice; Orim, Stella-Maris; Nting, Rexon
    Abstract: The study assesses the relationship between terrorism and social media from a cross section of 148 countries with data for the year 2012. The empirical evidence is based on Ordinary Least Squares, Negative Binomial and Quantile regressions. The main finding is that there is a positive relationship between social media in terms of Facebook penetration and terrorism. The positive relationship is driven by below-median quantiles of terrorism. In other words, countries in which existing levels of terrorism are low are more significantly associated with a positive Facebook-terrorism nexus. The established positive relationship is confirmed from other externalities of terrorism: terrorism fatalities, terrorism incidents, terrorism injuries and terrorism-related property damages. The terrorism externalities are constituents of the composite dependent variable.
    Keywords: Social Media; Terrorism
    JEL: D74 D83 O30
    Date: 2019–01
  24. By: Rothstein, Sidney A.
    Abstract: The growth models perspective analyzes the role of social blocs in crafting countries' economic policies, but its treatment of business power as purely structural prevents it from addressing an important question in the politics of digital transformation: How have new sectors with miniscule economic footprints been able to influence economic policy? This paper explores how tech and venture capital successfully lobbied for financial deregulation at the beginning of digital transformation in the United States. The paper argues that explaining the role of social blocs in digital transformation requires incorporating discourse analysis and develops a conceptual framework around three discursive components in the dynamics of social blocs: coordination, persuasion, and performativity. This framework contributes to theory development in the growth models perspective and illustrates how the concept of social blocs can help make sense of the politics of digital transformation.
    Keywords: digital transformation,discourse,growth models,social blocs,digitale Transformation,Diskurs,gesellschaftliche Koalitionen,Wachstumsmodelle
    Date: 2020
  25. By: Ozili, Peterson K
    Abstract: This article reports the conditions for optimality in financial inclusion. The optimal level of financial inclusion is achieved when basic financial services are provided to members of the population at a price that is affordable and that price is also economically sufficient to encourage providers of financial services to provide such financial services on a continual basis. Any level of financial inclusion that does not meet these conditions is sub-optimal. The consequence of sub-optimal levels of financial inclusion are reported and I show that maintaining a sub-optimal level of financial inclusion – which is common in many countries – is incentive-inefficient both for users and suppliers of basic financial services.
    Keywords: financial inclusion, optimal financial inclusion, excluded population, demand-side financial inclusion, supply-side financial inclusion.
    JEL: O12 O17 O50 R2
    Date: 2020

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