nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2020‒10‒12
25 papers chosen by

  1. Information and Communication Technology Diffusion and Financial Inclusion: An Interstate Analysis for India By Amrita Chatterjee; Simontini Das
  2. Fintech and big tech credit: a new database By Giulio Cornelli; Jon Frost; Leonardo Gambacorta; Raghavendra Rau; Robert Wardrop; Tania Ziegler
  3. Online reviews and customer satisfaction: The use of Trustpilot by UK retail energy suppliers and three other sectors By Littlechild, S.
  4. COVID-19 and the Search for Digital Alternatives to Cash By ; Rod Garratt; Michael Junho Lee
  5. Propuesta digital del sector de hospedaje marplatense a la pandemia By Zanfrillo, Alicia Inés; Artola, María Antonia; Morettini, Mariano; Marisquerena, Sergio Ezequiel
  6. International Trade Finance from the Origins to the Present: Market Structures, Regulation and Governance By Olivier Accominotti; Stefano Ugolini
  7. An Economic Perspective on Payments Migration By Anneke Kosse; Zhentong Lu; Gabriel Xerri
  8. A Decade of Evidence of Trend Following Investing in Cryptocurrencies By Evans Rozario; Samuel Holt; James West; Shaun Ng
  9. Financial Inclusion, Information and Communication Technology Diffusion and Economic Growth: A Panel Data Analysis By Amrita Chatterjee; Nitigya Anand
  10. Predicting Payment Migration in Canada By Anneke Kosse; Zhentong Lu; Gabriel Xerri
  11. On Possible Measures and Processes to Issue Digital Common Currency in ASEAN + 3 Including Challenges and Opportunities By Taiji Inui; Wataru Takahashi; Mamoru Ishida
  12. Consumer switching costs in a market with legal and pirate providers By Wojciech Hardy
  13. Regulating Platform Fees under Price Parity By Renato Gomes; Andrea Mantovani
  14. Watching Ads for Free Mobile Data: A Game-Theoretic Analysis of Sponsored Data with Reward Task By Subodha Kumar; Xiaowei Mei; Liangfei Qiu; Lai Wei
  15. Analysis of the factors that determine the long-term profitability of the initial supply of cryptocurrencies By Simonov, Andrey (Симонов, Андрей); Zyamalov, Vadim (Зямалов, Вадим); Sukhobok, Olga (Сухобок, Ольга)
  16. How Broadband Internet Affects Labor Market Matching By Manudeep Bhuller; Andreas R. Kostøl; Trond C. Vigtel
  17. Two-Sided Platforms and Biases in Technology Adoption By Jay Pil Choi; Doh-Shin Jeon
  18. Exploring digital government transformation in the EU: Expert Consultation and Stakeholder Engagement By Egidijus BARCEVICIUS; Cristiano CODAGNONE; Luka KLIMAVICIUTE; Gianluca MISURACA
  19. Marketing with Shallow and Prudent Influencers By Ron Berman; Xudong Zheng
  20. Food safety verification by block chain; a consumer-focused solution to the global food fraud crisis By Agetu, Richard
  21. Does Access to Microcredit Lead to Technology Adoption by Smallholder Farmers? Experimental Evidence from Rural Bangladesh By Chowdhury, Shyamal; Smits, Joeri; Sun, Qigang
  22. What Will Drive Long-Run Growth in the Digital Age? By Jakub Growiec
  23. Clean Energy Innovation and the Influence of Venture Capitalists' Social Capital By Till Fust
  24. Shedding Light on the Dark: The Impact of Legal Enforcement on Darknet Transactions By Jason Chan; Shu He; Dandan Qiao; Andrew B. Whinston
  25. Googlization and retail investors' trading activity By Christophe Desagre; Catherine D'Hondt

  1. By: Amrita Chatterjee (Assistant Professor, Madras School of Economics); Simontini Das (Assistant Professor, Jadavpur University, Kolkata: 700032)
    Abstract: Financial Inclusion has its primary objective in providing access to useful and affordable financial products and services that meet the needs of so far unbanked population for transactions, payments, savings, credit and insurance in a responsible and sustainable way. The penetration of banking services in India has made reasonable progress though there are still regional disparities with especially the rural and female population lagging behind. However, not only access but also usage of financial services matters. Moreover, as there is a strong initiative towards digitalized cashless economy in India, it is important to examine whether the country is ready for a more technology-driven financial system. As far as the diffusion of telecommunication technology is concerned, India has made a remarkable progress in urban areas giving rise to significant digital divide between rural and urban India. With spread of mobile and mobile internet though, this divide has come down to some extent. Thus if this inclination towards mobile technology can be properly channelized to improve the access as well as usage of financial services through spread of mobile banking then more and more people can be brought under the purview of institutional credit system leading to reduction in poverty and inequality. The current paper intends to study the role of information and communication technology (ICT) diffusion in improving the status of financial inclusion across the different states of India. Two separate indices for Financial Inclusion and Information Technology Diffusion are formed and the states are clustered to club the states similar in terms of their performance. Then the paper tries to test whether ICT diffusion is one of the indicators of Financial Inclusion in India. The dynamic panel data analysis helped us to identify the role of technology as well as other socio-economic factors which can contribute in interstate disparities in FI. The results show that technology does play an important role in improving financial inclusion. As the elderly people in rural as well as urban areas are still not that familiar with mobile and internet, they may not be able to get benefited by ICT revolution. But lack of education and more importantly poor status of financial literacy play a very vital role in FI
    Keywords: Financial Inclusion, Information and Communication Technology Diffusion, Dynamic Panel Data Model
    JEL: L86 L96 C23 G21
  2. By: Giulio Cornelli; Jon Frost; Leonardo Gambacorta; Raghavendra Rau; Robert Wardrop; Tania Ziegler
    Abstract: Fintech and big tech platforms have expanded their lending around the world. We estimate that the flow of these new forms of credit reached USD 223 billion and USD 572 billion in 2019, respectively. China, the United States and the United Kingdom are the largest markets for fintech credit. Big tech credit is growing fast in China, Japan, Korea, Southeast Asia and some countries in Africa and Latin America. Cross-country panel regressions show that such lending is more developed in countries with higher GDP per capita (at a declining rate), where banking sector mark-ups are higher and where banking regulation is less stringent. Fintech credit is larger where there are fewer bank branches per capita. We also find that fintech and big tech credit are more developed where the ease of doing business is greater, and investor protection disclosure and the efficiency of the judicial system are more advanced, the bank creditto- deposit ratio is lower and where bond and equity markets are more developed. Overall, alternative credit seems to complement other forms of credit, rather than substitute for them.
    Keywords: fintech, big tech, credit, data, technology, digital innovation
    Date: 2020–09
  3. By: Littlechild, S.
    Abstract: Online consumer reviews are now widely used and influential. Trustpilot is a relatively new but rapidly growing consumer review website. It is by far the most used review website in UK retail energy supply sector. This paper provides some background and insight into how Trustpilot works, how it is used in that sector, and for comparison in three other sectors (supermarkets, banking and mobile phones), and how this usage has evolved over 2019 and 2020. There is great variation in usage of Trustpilot both within and between sectors. Trustpilot was least used by supermarkets and their customers, and most by energy suppliers and customers. Many aspects of usage, including numbers of Trustpilot domains claimed by companies, invitations to review, reviews and responses to reviews, have increased over 2019-20, although not evenly. Former incumbent companies typically make less use of Trustpilot in all four sectors, and have lower TrustScores than entrants. However, five of the six Large energy suppliers have made significantly increased use of Trustpilot over 2019-20, and their TrustScores have increased. Detailed examination of Trustpilot use by ten energy suppliers explains how inviting Trustpilot reviews enables them to improve customer service as well as increase TrustScores. A final pair of comparisons shows that companies advising UK customers on energy supply score highly on Trustpilot, and make active use of it. In contrast, voluntary and regulatory organisations in the UK energy sector and their customers make little use of it, and these organisations have very low TrustScores.
    Keywords: Online reviews, customer satisfaction, customer feedback, Trustpilot, retail energy market, supermarkets, banks, mobile phone providers
    JEL: L15 L84 L94
    Date: 2020–09–16
  4. By: ; Rod Garratt; Michael Junho Lee
    Abstract: Today, the majority of retail payments in the United States are digital. Practically all digital payments are tracked, collected, and aggregated by financial institutions, payment providers, and vendors. This trend has accelerated during the COVID-19 pandemic as payments that require physical contact, such as cash, have been discouraged. As cash gradually becomes obsolete, consumers are left with fewer alternatives for making private transactions. In this post, we outline some evidence on the impact of COVID-19 on consumer payment behavior and follow up in the second post in this Liberty Street Economics series with a look at the implications of cash obsolescence for privacy.
    Keywords: COVID-19; digital payments; cash; privacy
    JEL: D14 E42 I18
    Date: 2020–09–28
  5. By: Zanfrillo, Alicia Inés; Artola, María Antonia; Morettini, Mariano; Marisquerena, Sergio Ezequiel
    Abstract: Este trabajo se propone caracterizar la propuesta comercial en el ámbito digital en 69 empresas del sector de hospedaje de la ciudad de Mar del Plata durante la implementación del aislamiento social preventivo obligatorio -ASPO- determinado por el Poder Ejecutivo Nacional a partir del día 20 de marzo de 2020 en el país. Para el análisis se desarrolla un diagnóstico de la situación actual respecto de las medidas que regulan su actividad comercial y sobre la adopción de estrategias digitales para la oferta de sus servicios como respuesta ante la situación de emergencia suscitada por la pandemia a nivel mundial y en la ciudad en particular. Se consignan además las promociones establecidas por los establecimientos hoteleros para reactivar la comercialización de sus servicios de alojamiento en los canales electrónicos y la extensión e intensidad de su adopción. Se pretende proveer información estadística sobre las estrategias que adoptaron los hoteles de categoría superior y de tres estrellas a través de las tecnologías de la información y de la comunicación -TIC- para ofrecer sus servicios y el grado de aplicación en el sector a partir del reconocimiento de la situación de emergencia en que se encuentra por la abrupta caída de facturación respecto del año anterior para el período en estudio.
    Keywords: Estrategia Comercial; Sector Hotelero; Tecnologías de la Información y las Comunicaciones; Internet; Aislamiento Social; COVID-19;
    Date: 2020–08
  6. By: Olivier Accominotti (LSE - Economic History Department - London school of economics and political science - LSE - London School of Economics and Political Science); Stefano Ugolini (LEREPS - Laboratoire d'Etude et de Recherche sur l'Economie, les Politiques et les Systèmes Sociaux - UT1 - Université Toulouse 1 Capitole - UT2J - Université Toulouse - Jean Jaurès - Institut d'Études Politiques [IEP] - Toulouse - ENSFEA - École Nationale Supérieure de Formation de l'Enseignement Agricole de Toulouse-Auzeville)
    Abstract: This chapter presents a history of international trade finance - the oldest domain of international finance - from its emergence in the Middle Ages up to today. We describe how the structure and governance of the global trade finance market changed over time and how trade credit instruments evolved. Trade finance products initially consisted of idiosyncratic assets issued by local merchants and bankers. The financing of international trade then became increasingly centralized and credit instruments were standardized through the diffusion of the local standards of consecutive leading trading centres (Antwerp, Amsterdam, London). This process of market centralization/product standardization culminated in the nineteenth century when London became the global centre for international trade finance and the sterling bill of exchange emerged as the most widely used trade finance instrument. The structure of the trade finance market then evolved considerably following the First World War and disintegrated during the interwar de-globalization and Bretton Woods period. The reconstruction of global trade finance in the post-1970 period gave way to the decentralized market structure that prevails nowadays.
    Keywords: Bills of exchange,Letter of credit,Market structure,Trade finance
    Date: 2020–09–02
  7. By: Anneke Kosse; Zhentong Lu; Gabriel Xerri
    Abstract: Consumers, businesses and banks make millions of payments each day using a variety of instruments, such as debit cards, cheques and wires. Canada is currently developing three new systems to process these transactions: Lynx, Settlement Optimization Engine (SOE) and Real-Time Rail (RTR).
    Keywords: Financial services; Financial system regulation and policies; Payment clearing and settlement systems
    JEL: E4 E42 G2 G21
    Date: 2020–06
  8. By: Evans Rozario; Samuel Holt; James West; Shaun Ng
    Abstract: Cryptocurrency markets have many of the characteristics of 20th century commodities markets, making them an attractive candidate for trend following strategies. We present a decade of evidence from the infancy of bitcoin, showcasing the potential investor returns in cryptocurrency trend following, 255% walkforward annualised returns. We find that cryptocurrencies offer similar returns characteristics to commodities with similar risk-adjusted returns, and strong bear market diversification against traditional equities. Code available at nds.
    Date: 2020–09
  9. By: Amrita Chatterjee (Assistant Professor, Madras School of Economics); Nitigya Anand (Associate Solution Advisor, Deloitte & Touche Assurance and Enterprise Risk Services India Pvt. Ltd.)
    Abstract: There have been enough evidences to accept that Financial Inclusion (FI) and Information and Communication Technology (ICT) play positive role in economic growth, even though there are some exceptions. Moreover, we cannot deny the fact that ICT like mobile phone and internet penetration can strengthen the inclusiveness of formal banking sector. The present study has first examined whether ICT development can be an important determinant of Financial Inclusion by using a fixed effect panel data model. The results show that ICT is indeed an important determinant of FI. The same panel data of 41 countries was then used to test whether the growth process of the countries are influenced by Financial Inclusion and ICT diffusion in a dynamic Panel Data Model. Further the paper has investigated the role of FI powered by a better ICT penetration in fostering the growth of the nations using system GMM method by incorporating interactions between FI and ICT indicators. The results suggest that both FI and ICT individually and together through their close interaction can improve current year’s growth. However, we need education, awareness and technical assistance to get sustained growth.
    Keywords: Financial Inclusion, Growth, Information and Communication Technology, Dynamic Panel data model, System GMM estimator
    JEL: L86 L96 C23 O0 G2
  10. By: Anneke Kosse; Zhentong Lu; Gabriel Xerri
    Abstract: Canada currently has two core payment systems for processing funds transfers between financial institutions: the Large Value Transfer System (LVTS) and the Automated Clearing Settlement System (ACSS). These systems will be replaced over the next years by three new systems: Lynx, the Settlement Optimization Engine (SOE) and the Real-Time Rail (RTR). We employ historical LVTS and ACSS data to predict the demand for the future systems. The results show that small-value LVTS payments will likely migrate to SOE. Also, in the short run, about CAD 10,000 billion of LVTS and ACSS payments (per year) is anticipated to migrate to the RTR if not subject to maximum transaction values. These migration patterns raise important policy questions, such as whether the future systems should be subject to value caps and/or higher collateral requirements.
    Keywords: Financial institutions; Financial services; Financial stability; Financial system regulation and policies; Payment clearing and settlement systems
    JEL: C3 E4 E42 G1 G2 G28
    Date: 2020–09
  11. By: Taiji Inui (Japan International Cooperation Agency (JICA) advisor for Central Bank of Myanmar and Asian Development Bank (ADB) consultant for Cross-border Settlement Infrastructure Forum (CSIF)); Wataru Takahashi (Faculty of Economics, Osaka University of Economics and Research Fellow, Research Fellow, Research Institute for Economics and Business Administration, Kobe University, Japan); Mamoru Ishida (Itochu Corporation, Japan)
    Abstract: Following the previous paper by Inui, Takahashi, and Ishida (2020), this paper discusses possible measures and processes of Asia (ASEAN+3) digital common currency (ADCC) issued by central banks in ASEAN+3 countries/economies backed by the ADCC denominated bonds issued by an international organization (such as AMRO). This paper also tries to explain authors' views on some possible challenges which need to be solved from practical perspective such as anonymity, counterfeit, AML/CFT, etc. as well as weight of local currencies for the basket currency ACU which could be used as a currency unit for ADCC (AMRO coin for example). In recent years, central banks in many countries are interested in developing the individual digital currencies as their legal tenders. Also, considering the trend of borderless economy, a borderless (cross-border) currency will naturally be focused on sooner or later to meet such an economic trend. Because of the development of digital technologies, it is getting easier to issue and circulate such a borderless currency in a digital form. This paper is trying to propose an idea to meet such a trend.
    Keywords: Digital currency; Asia common currency; Anonymity; AML/CFT
    JEL: E42 F33 F36
    Date: 2020–09
  12. By: Wojciech Hardy
    Abstract: Despite a rich literature on switching costs in traditional markets, little has been said on the context of competition between pirate and legal providers. With a sizeable literature on the effects of piracy and its determinants, it is crucial to understand the specific barriers that may prevent consumers from diverting to unauthorised consumption in the first place. Basing on existing switching cost typologies, literature on piracy and new empirical evidence, I provide a first thorough categorisation of different switching costs in a market with legal and pirate providers. I discuss the implications for consumer retention strategies.
    Keywords: switching costs, piracy, competition, digital goods, file-sharing
    JEL: D4 L1 M2
    Date: 2020–08
  13. By: Renato Gomes (Toulouse School of Economics, 1, Esplanade de l’Université, 31080, Toulouse, France); Andrea Mantovani (Toulouse Business School, 1, Place Alphonse Jourdain, 31068, Toulouse, France)
    Abstract: Online marketplaces, such as Amazon, or online travel agencies, such as, greatly expand consumer information about market offers, but also raise firms’ marginal costs by charging high commissions. To prevent show-rooming, platforms adopted price parity clauses, which restrict sellers’ ability to offer lower prices in alternative sales channels. Whether to uphold, reform, or ban price parity has been at the center of the policy debate, but so far little consensus has emerged. In this paper, we investigate a natural alternative to lifting price parity; namely, we study how to optimally cap platforms’ commissions. The optimal cap reflects the Pigouvian precept according to which the platform should not charge fees greater than the externality that its presence generates on other market participants. Employing techniques from extreme-value theory, we are able to express the optimal cap in terms of observable quantities. In an application to online travel agencies, we find that current average fees are welfare increasing only if platforms at least double consumers’ consideration sets (relative to alternative ways of gathering information online). This suggests that, in some markets, regulation capping commissions should bind if optimally set.
    Keywords: platforms, price parity, regulation, commission caps, extreme value theory.
    JEL: D83 L10 L41
    Date: 2020–09
  14. By: Subodha Kumar (Fox School of Business, Temple University); Xiaowei Mei (Department of Management and Marketing, Hong Kong Polytechnic University); Liangfei Qiu (Warrington College of Business, University of Florida); Lai Wei (Antai College of Economics & Management, Shanghai Jiao Tong University)
    Abstract: Sponsored data with reward task is an emerging monetization mechanism in which consumers are subsidized with free megabytes by content providers (CPs, e.g., Netflix) in exchange for engagement with advertisers by performing various forms of reward task. Consumers are endowed with the option of whether or not to participate in reward tasks, which is different from traditional push advertising that consumers have no control of. Although it is an emerging phenomenon, to the best of our knowledge, this has not yet been analyzed rigorously. In order to fill this gap in literature, we provide an economic analysis of this mechanism. Our results show that, interestingly, CP’s optimal subsidization rate increases in its marginal revenue of traditional advertising, but decreases in that of reward task. We also find that the amount of reward tasks performed by consumers actually sometimes decreases with these revenue rates. Further, while the profit of both the CP and the mobile network operator (e.g., AT&T) increases with the marginal revenue of traditional advertising, the effect of the marginal revenue of reward task on their profit is not straightforward. Specifically, when the marginal revenue of reward tasks is relatively high, it affects the CP and the mobile network operator’s profit positively; otherwise, the effect is reversed. We further find that, interestingly, the introduction of sponsored data might not necessarily increase consumer surplus. Similarly, although vertical integration of the mobile network operator and the CP reduces double marginalization by aligning incentives and reducing strategic information asymmetry, we find that it could sometimes hurt consumer surplus. Our results provide important insights for both the mobile network operator and the CP. In addition, we also provide useful guidance to policymakers.
    Keywords: mobile network operator; sponsored data; reward task; vertical integration; game theory
    JEL: C72 D47 L96
    Date: 2020–09
  15. By: Simonov, Andrey (Симонов, Андрей) (The Russian Presidential Academy of National Economy and Public Administration); Zyamalov, Vadim (Зямалов, Вадим) (The Russian Presidential Academy of National Economy and Public Administration); Sukhobok, Olga (Сухобок, Ольга) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: Cryptocurrencies have recently begun to attract attention of investors. Initial Coin Offering (ICO), being essentially one of the forms of crowdfunding, offer investment opportunities that are close to traditional securities. Cryptocurrencies are currently being traded on specialized exchanges, also the first funds focused on investing in cryptocurrencies are emerging. Nevertheless, this type of investment has a large number of “pitfalls”: legal uncertainty regarding the status of this market, extremely high price volatility, a high percentage of unsuccessful or scum ICOs, and the absence of any guarantees. On the other hand, there is still an extremely small number of studies on this topic. This makes the present work extremely useful in terms of understanding the processes in the new cryptocurrency market.
    Date: 2020–05
  16. By: Manudeep Bhuller (University of Oslo); Andreas R. Kostøl (Arizona State University); Trond C. Vigtel (University of Oslo)
    Abstract: How the internet affects job matching is not well understood due to a lack of data on job vacancies and quasi-experimental variation in internet use. This paper helps fill this gap using plausibly exogenous roll-out of broadband infrastructure in Norway, and comprehensive data on recruiters, vacancies and job seekers. We document that broadband expansions increased online vacancy-postings and lowered the average duration of a vacancy and the share of establishments with unfilled vacancies. These changes led to higher job-finding rates and starting wages and more stable employment relationships after an unemployment-spell. Consequently, our calculations suggest that the steady-state unemployment rate fell by as much as one-fifth.
    Keywords: Unemployment, Information, Job Search, Matching
    JEL: D83 J63 J64 L86
    Date: 2020–01
  17. By: Jay Pil Choi; Doh-Shin Jeon
    Abstract: We investigate the relationship between market structure and platforms’ incentives to adopt technological innovations in two-sided markets, where platforms may find it optimal to charge zero price on the consumer side and to extract surplus on the advertising side. We consider innovations that affect the two sides in an opposite way. We compare private incentives with social incentives and find that the bias in technology adoption depends crucially on whether the non-negative pricing constraint binds or not. Our results provide a rationale for a tougher competition policy to curb concentration if competition authorities put more weight on consumer surplus in welfare calculations.
    Keywords: technology adoption, two-sided platforms, non-negative pricing constraint, pass-through
    JEL: D40 L10 L50
    Date: 2020
  18. By: Egidijus BARCEVICIUS (PPMI); Cristiano CODAGNONE (Open Evidence); Luka KLIMAVICIUTE (PPMI); Gianluca MISURACA (European Commission - JRC)
    Abstract: This report provides an overview of the main activities of experts consultation and stakeholder engagement conducted as part of the JRC research on "Exploring Digital Government Transformation in the EU: understanding public sector innovation in a data-driven society" (DigiGov). The aim of these activities was to validate the results of the study while gaining insights on future research directions and policy developments. To this end, a group of recognised experts and representatives of key stakeholders drawn from a diverse range of academic disciplines and practices in the areas of digital government and data for policy at European and international level were actively engaged. The consultation and engagement activities included a first Consultation Workshop in Ispra, a Policy Lab in Seville and an online Foresight Workshop, as well as the establishment of the DigiGov online community of practice, facilitated by JRC, to further disseminate scientific results and contribute shaping policy recommendations for the future of Digital Government transformation in the European Union.
    Keywords: Digital Government, Public Sector Innovation, Stakeholders' engagement, Co-Design, Foresight
    Date: 2020–08
  19. By: Ron Berman (The Wharton School, University of Pennsylvania, 3730 Walnut Street, Philadelphia, PA 19104, USA); Xudong Zheng (Johns Hopkins University, 3100 Wyman Park Drive, Baltimore, MD 21211, USA)
    Abstract: Marketers often utilize social media influencers to reach audiences with more authentic and credible messaging. While some influencers are prudent and carefully test products before promoting them, many others are shallow and merely post the marketer messaging as is. We analyze the impact of shallow and prudent influencers on marketer profits, customer satisfaction, and influencer payoffs. Counter to intuition, we find that shallow influencers increase market transparency, consumer satisfaction and marketer profits, while prudent influencers entice the marketers to reduce information efficiency in the market, and increase the share of unsatisfied consumers. In a market where both shallow and prudent influencers exist, prudent influencers may increase their payoff even further by extracting additional information rent. The results provide insight into the value that shallow influencers bring to the market and guidance for marketers considering the use of influencer marketing.
    Keywords: influencer marketing; product reviews; information design; Bayesian persuasion
    JEL: D82 D83 M31
    Date: 2020–09
  20. By: Agetu, Richard
    Abstract: Food fraud is an age long challenge motivated by economic reasons. It is defined as the intentional substitution, addition, tampering and misrepresentation of food, food ingredients or food packaging for economic gain . Research has shown that food fraud costs at least $65 billion globally . Food experts tagged 2018 as the year of food fraud and fraud prevention strategies due to the shocking amounts and forms witnessed. Some of these included fake cherries, counterfeit honey, fake (plastic) rice, counterfeit wine, fake fish, etc. To combat counterfeiting, various certification programmes have been launched. However, counterfeit labelling which is the act of claiming certifications which have not been obtained by food producers on product packaging have ensued and become popular in developing countries. This new challenge has increased the need for a food safety verification system that enables prospective consumers to verify the authenticity of food products as quickly and as convenient as possible. In 2008, blockchain technology made its public debut and in just over a decade, it has shown potential for usefulness in every sector, including agriculture. It gained public trust and wide acceptance because they are distributed, utilizes cryptography, is open and has timestamps on every data recorded. Due to the combination of these features, it is considered unique and the most secure data framework for big data. Given the features of the blockchain system listed above, it is considered a more effective tool for food authenticity verification. The combination of serialization and blockchain will certainly proffer a fast and effective solution to counterfeit labelling issues in the global food industry, but this is also dependent on its level of adoption. A review of literature and industry articles revealed that a lot of attempts are being made in the use of blockchain for value chain traceability, farmer positioning, logistics, entering new markets and transaction costs. Most of these tools are utilized by most actors in the value chain but the consumer. Very little has been done in creating consumer centered verification tools using blockchain and this is a huge gap. This poster presentation intends to highlight the features and possible ways blockchain can equip consumers in developing countries with tools to verify the safety of food reliably and timely.
    Keywords: Food Consumption/Nutrition/Food Safety
    Date: 2020–09–16
  21. By: Chowdhury, Shyamal; Smits, Joeri; Sun, Qigang
    Abstract: Agricultural productivity in many developing countries remains low owing mostly to the low adoption of readily available modern technologies such as modern seeds, chemical fertilisers and mechanized irrigation. To understand if relaxing credit constraints increases the adoption of agricultural technologies, we use results from a field experiment designed to estimate the effect of access to microcredit on agricultural technology adoption. We find mere offering of microcredit to smallholder farmers does not lead to the adoption of agricultural technologies. Nevertheless, there is strong evidence of a heterogeneous treatment effects: borrowers with medium-sized farms are 13.3 per cent more likely to adopt modern technologies. In addition, less-risk averse borrowers, and present-biased borrowers are 13.1 per cent and 12.3 per cent more likely to adopt modern technologies.
    Keywords: Research and Development/Tech Change/Emerging Technologies
    Date: 2020–09–16
  22. By: Jakub Growiec
    Abstract: This paper considers the prospective sources of long-run growth in the future. Historically, in the industrial era and at the early stage of the digital era (which began approximately in the 1980s) the main growth engine is R&D. If in the future all essential production or R&D tasks will eventually be subject to automation, though, the engine of growth will be shifted to the accumulation of programmable hardware (capital), and R&D will lose its prominence. By contrast, if neither production nor R&D tasks will be fully automated, R&D will remain the main growth engine. Additional mechanisms potentially accelerating and sustaining growth are the accumulation of R&D capital (particularly important under partial automation), and hardware-augmenting technical change.
    Keywords: long-run growth, factor accumulation, technical change, automation, asymptotic dynamics
    JEL: O30 O40
    Date: 2020–09
  23. By: Till Fust
    Abstract: This study contributes to the understanding of the enabling role that venture capitalists can play in bringing new innovative technologies to market, with a focus on clean energy technologies. Applying the structural model introduced by Sorensen (2007) that allows to control for a potential sorting bias, I estimate the influence of venture capital investor's social capital on startups' funding and exit performance, with social capital de ned as the investors' eigencentrality and constraint within the network of investors. Looking at startups' first venture capital funding rounds in California between 2001 and 2019, this study finds a positive and significant influence of the lead investor's eigencentrality on the funding amount raised and the exit probability of the firm. Furthermore, a less constrained lead investor also increases the chance of the startup's eventual exit. But no differentiated effect for cleantech startups compared to other industries is found.
    Keywords: Venture Capitalists;CleanEnergy; Clean Technologies; Startups; Capital Funding; Cleantech startup
    JEL: O14 O33 Q41 Q42
    Date: 2020–09–29
  24. By: Jason Chan (Carlson School of Management, University of Minnesota); Shu He (Department of Operations and Information Management, School of Business, University of Connecticut); Dandan Qiao (Department of Informations Systems and Analytics, School of Computing, National University of Singapore); Andrew B. Whinston (Department of Information, Risk, and Operations Management, McCombs School of Business, The University of Texas at Austin)
    Abstract: Darknet markets have been increasingly used for the transaction of illegal products and services in the last decade. In particular, it is estimated that drugs make up two-thirds of darknet market transactions. The growth of illicit transactions on darknet markets have led enforcement agencies to invest greater proportion of time and efforts to monitor and crack down on criminal activities on the darknet websites. Despite the successes in convicting perpetrators, it is unknown whether these policing efforts are truly effective in deterring future darknet transactions, given that the identities of the transacting parties are very well protected by the markets’ features. To this end, this study attempts to empirically evaluate the susceptibility of darknet markets breaking down upon police arrests of dealers and buyers. Using drug review data from a few major darknet markets, we discovered a deterrence impact – the transactions in the targeted country would decrease on the market where arrests occurred. More interestingly, we find that disclosure of the arrests will influence the transactions of vendors not only from the same country but also those from other countries that did not experience any arrest incidents. As the darkweb techniques have led to a considerable proliferation of online drug trading, we believe that study findings that reveal the nature of these illicit markets will have key policy and theoretical implications to law makers, enforcement agencies, and academicians.
    Keywords: darknet; illegal transactions; police enforcement; cybercrime; deterrence effect
    JEL: K42
    Date: 2019–09
  25. By: Christophe Desagre; Catherine D'Hondt
    Keywords: Investor attention ; Google SVI ; Retail investors
    Date: 2020–01–01

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.