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on Payment Systems and Financial Technology |
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Issue of 2021‒04‒26
34 papers chosen by |
| By: | León, Carlos |
| Abstract: | Mobile wallets replicate physical wallets on a mobile device, in which users can store different payment instruments (e.g., cards, transfers) to make mobile payments. As the mobile wallet is adopted, a mobile payment scheme emerges, with its users as elements in a network of transfers. In this article, I study the mobile payment scheme of Movii— the first fintech firm in Colombia operating under a financial non-banking license for electronic deposits and payments. Based on a unique dataset of bilateral transfers between Movii’s mobile wallet users, I build, visualize and analyze Movii’s network, daily from November 18, 2017, to November 25, 2020. Besides the anticipated increase in the number of users and the value of transfers, the visual and quantitative complexity of the network of transfers increases over time. This increase in complexity is likely to be linked to the adoption of Movii’s mobile wallet, which results in users finding new ways to use mobile payments beyond person-to-person transfers, including person-to-business and business-to-business. Also, results suggest the Covid-19 pandemic accelerated the evolution of Movii’s mobile payments scheme. |
| Keywords: | Payments; Mobile; Networks; Fintech; Paytech; Complexity |
| JEL: | L14 D85 E42 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:rie:riecdt:78&r=all |
| By: | Valentina Michelangeli (Bank of Italy); Eliana Viviano (Bank of Italy) |
| Abstract: | We are in a digital era. Internet banking has been increasingly offered by banks (through simple websites and easy-to-use mobile apps) and demanded by customers for managing their own finances without going to the physical branch. The availability of this new channel to interact with financial intermediaries can reduce households' cost of acquiring information and the time spent for financial transactions; therefore, it could also impact on households' choice to start investing in financial markets. As the decisions to adopt Internet banking and to entry into financial markets could be jointly determined, we derive a measure of bank supply of Internet-based services, which constitutes our instrumental variable and it is assigned to each household in the sample. We find that the adoption of Internet banking induces households to participate in financial markets and, in particular, to hold short term assets with a low risk/return profile. Over time the adoption of Internet banking also drives a higher understanding of basic standard financial concepts. |
| Keywords: | Internet banking, financial market participation, household finance |
| JEL: | D14 G11 O33 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_1329_21&r= |
| By: | José Tomás Llanos |
| Abstract: | This report presents evidence on efforts taken by companies to ensure trust in the digital economy through transparency reporting. Focussing on the world’s most widely used social media platforms, online communication services, file-sharing platforms and other online services (many of which are based in the United States), the report identifies both good practices and challenges in transparency reporting. Challenges include limited informative value and comparability, as well as an inability to provide reliable information on the extent to which governments gain access to personal data held by the private sector. A range of actions are proposed to address these challenges, recognising the need to develop a more robust evidence base by expanding the number of countries and companies analysed. This report informed the review of the OECD Privacy Guidelines. |
| Date: | 2021–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaab:309-en&r= |
| By: | Asongu, Simplice; Biekpe, Nicholas; Cassimon, Danny |
| Abstract: | The present research extends Lashitew, van Tulder and Liasse (2019, RP) in order to understand the greater diffusion of mobile money innovations in Africa. To make this assessment, a comparative analysis is engaged between sampled African countries and the corresponding sampled developing countries. Three main types of predictor groups are used for the study, namely: demand, supply and macro-level factors. The empirical evidence is based on Tobit regressions. The tested hypothesis is confirmed because from a comparative analysis between African-specific estimates and those of the sampled countries, not all factors driving mobile money innovations in Africa are apparent in the findings of Lashitew et al. (2019). An extended analysis is also performed to take on board the concern of multicollinearity from which, the best estimators from the study are derived. Comparative findings from correlation analysis show that an African specificity is largely traceable to the ‘unique mobile subscription rate’ variable. An in-depth empirical analysis further confirms an African specificity in the outcome variables (especially in the mobile used to send/receive money) which, may be traceable to informal sector variables not documented in Lashitew et al. (2019). Scholarly and policy implications are discussed. |
| Keywords: | Mobile money; technology diffusion; financial inclusion; inclusive innovation |
| JEL: | D10 D14 D31 D60 O30 |
| Date: | 2020–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107086&r=all |
| By: | Davcheva, Elena |
| Abstract: | This thesis summarizes three studies in the area of machine learning applications within mental heathcare, specifically in the area of treatments and diagnostics. Mental healthcare today is challenging to provide worldwide because of a stark rise in demand for services. Traditional healthcare structures cannot keep up with the demand and information systems have the potential to fill in this gap. The thesis explores online mental health forums as a digital mental health platform and the possibility to automate treatments and diagnostics based on user-shared information. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:126173&r= |
| By: | Asongu, Simplice |
| Abstract: | This paper examines the joint effects of mobile phone technology, knowledge creation and diffusion on inclusive human development in 49 sub-Saharan African (SSA) countries. The empirical evidence is based on Tobit regressions for the period 2000-2012. The net effects of interactions between the mobile phone, knowledge creation and diffusion variables are positive indicating that the combined effects of these variables improve inclusive human development in SSA countries. Further analysis dividing the dataset into a number of fundamental characteristics based on economic, legal, religion and political stability associated with African economies show that mobile phone penetration and associated innovation in SSA improve inclusive human development irrespective of the country’s level of income, legal origins, religious orientation and the state of the nation. The pupil-teacher ratio exerts a negative influence on the outcome variable which is favourable for inclusive human development because higher ratios denote lower education quality since more pupils are accommodated by fewer teachers. The study contributes to innovation diffusion theory and economic development literature. |
| Keywords: | Mobile phones; Innovation, Knowledge diffusion; Inclusive human development; Africa |
| JEL: | G20 I10 I32 O40 O55 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107087&r=all |
| By: | André Grow (Max Planck Institute for Demographic Research, Rostock, Germany); Daniela Perrotta (Max Planck Institute for Demographic Research, Rostock, Germany); Emanuele Del Fava (Max Planck Institute for Demographic Research, Rostock, Germany); Jorge Cimentada (Max Planck Institute for Demographic Research, Rostock, Germany); Francesco Rampazzo (Max Planck Institute for Demographic Research, Rostock, Germany); Beatriz Sofía Gil-Clavel (Max Planck Institute for Demographic Research, Rostock, Germany); Emilio Zagheni (Max Planck Institute for Demographic Research, Rostock, Germany); René D. Flores; Ilana Ventura; Ingmar G. Weber |
| Abstract: | Social scientists increasingly use Facebook’s advertising platform for research, either in the form of conducting digital censuses of the general population, or for recruiting participants for survey research. Both approaches depend on the reliability of the data that Facebook provides about its users, but little is known about how reliable these data are. We address this gap in a large-scale, cross-national online survey (N = 137,224), in which we compare self-reported and Facebook-classified demographic information (sex, age, and region of residence). Our results suggest that Facebook’s advertising platform can be fruitfully used for conducing social science research if additional steps are taken to assess the reliability of the characteristics under consideration. |
| Keywords: | World, digital demography, population censuses, social network, surveys |
| JEL: | J1 Z0 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:dem:wpaper:wp-2021-006&r= |
| By: | Boller, Daniel (University of St. Gallen); Lechner, Michael (University of St. Gallen); Okasa, Gabriel (University of St. Gallen) |
| Abstract: | Online dating emerged as a key platform for human mating. Previous research focused on socio-demographic characteristics to explain human mating in online dating environments, neglecting the commonly recognized relevance of sport. This research investigates the effect of sport activity on human mating by exploiting a unique data set from an online dating platform. Thereby, we leverage recent advances in the causal machine learning literature to estimate the causal effect of sport frequency on the contact chances. We find that for male users, doing sport on a weekly basis increases the probability to receive a first message from a woman by 50%, relatively to not doing sport at all. For female users, we do not find evidence for such an effect. In addition, for male users the effect increases with higher income. |
| Keywords: | online dating, sports economics, big data, causal machine learning, effect heterogeneity, Modified Causal Forest |
| JEL: | J12 Z29 C21 C45 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14259&r=all |
| By: | Kelly, Jessie |
| Abstract: | Content moderation is the core business of Facebook. This paper seeks to explore the extent to which the new Facebook Oversight Board will influence Facebook's content moderation practices and why it was created in the first place. It begins exploring the buy in from users to the content available on the platform, without which Facebook ceases to have a business model. As such, the extent to which Facebook is seen to legitimately respond to criticisms of its content moderation enables it to retain its position, legitimacy and autonomy. The Facebook Oversight Board or ‘FOB’ is one exercise aimed at retaining control over content moderation, and while the Board will see only a small subset of cases comprised of those already removed from the platform it will play a broader role in influencing the perception of Facebook’s content moderation practices, and subsequently in shaping those practices and associated international legislation. |
| Date: | 2021–04–18 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:mnb9a&r= |
| By: | James Fudurich; Lena Suchanek; Lise Pichette |
| Abstract: | Firms are at the forefront of adopting new technology. Using survey data from a global network of central banks, we assess the effects of digitalization on firms’ pricing and employment decisions. |
| Keywords: | Firm dynamics; Inflation and prices; Labour markets |
| JEL: | D22 E31 J21 O33 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocadp:21-7&r= |
| By: | Asongu, Simplice; Biekpe, Nicholas; Cassimon, Danny |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107097&r=all |
| By: | Catia Batista; Sandra Sequeira; Pedro C. Vicente |
| Abstract: | We examine the complementarity between access to mobile savings accounts and improved financial management skills on the performance of female-led micro-enterprises in Mozambique. This combined support is associated with a large increase in both short and long-term firm profits and in financial security, when compared to the independent effect of each of these interventions. This support allowed female-headed micro-enterprises to close the gender gap in performance and financial literacy relative to their male counterparts. The main drivers of improved business performance are increased financial management practices (bookkeeping), an increase in accessible savings and reduced transfers to friends and relatives. |
| Keywords: | Microenterprise development, management, gender, mobile money, financial literacy, economic development |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:unl:novafr:wp2104&r= |
| By: | Worrell, DeLisle (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise) |
| Abstract: | The currencies of Caribbean countries have now outlived their usefulness, and have become a liability. They were devised at a time when most payments were made using notes and coin, issued in distant metropolitan centres. Scarcity of the means of payment was a severe hindrance to commerce. In response Currency Boards were set up, to issue local currency as needed in the colonies. The system worked well because the local currency issue was backed by an equivalent value of Sterling, in a global system of fixed exchange rates. In contrast, nowadays payments are made mostly by electronic communication, credit and debit cards, cheques and drafts, with settlement over digitized bank accounts. In today’s world an own currency has become a liability for small economies, limiting access to international goods and services, exposing residents to risks of currency devaluation and inflation, eroding the value of domestic savings, increasing economic inequalities, providing a tool for unproductive government spending, and diverting attention from the need to increase productivity and enhance international competitiveness. |
| Keywords: | Dollarisation; exchange rate; fixed exchange rate; foreign currency; currency board; open economy |
| JEL: | F31 F32 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:ris:jhisae:0179&r= |
| By: | Kim, Jae Yeon (University of California, Berkeley) |
| Abstract: | The advent of social media has increased digital content and, with it, hate speech. Advancements in machine learning algorithms help detect online hate speech at scale; nevertheless, these systems are far from perfect. Human-annotated hate speech data, used to train automated hate speech detection systems, is susceptible to racial/ethnic, gender, and other bias. To address societal and historical biases in automated hate speech detection, scholars and practitioners need to focus on the power dynamics: who decides what comprises hate speech. Examining inter- and intra-group dynamics can facilitate understanding of this causal mechanism. This intersectional approach deepens knowledge of the limitations of automated hate speech detection systems and bridges social science and machine learning literature on biases and fairness. |
| Date: | 2021–04–10 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:chvgp&r= |
| By: | Uduji, Joseph; Okolo-Obasi, Elda; Asongu, Simplice |
| Abstract: | Food prices in Nigeria have become significantly higher and more volatile since 2012. The purpose of this research was to find out what affects farmers’ participation in the growth enhancement support scheme (GESS) in the country. We determined the effect of the GESS on the ease of access to market information and agricultural inputs that influence price volatility at farm gate level. A total of 2100 rural farmers were sampled across Nigeria’s six geopolitical zones. Result from the use of recursive bivariate probit model showed that farmers depended on the GESS for the resolution of food price volatility by providing food market information and agricultural inputs that bring down the incidence and amount of anxiety-impelled price rise in Nigeria. The results advocated for the need to improve the GESS in line with the agricultural transformation agenda (ATA) by cutting down the deterrents mostly linked with the use of mobile phones, and the distance of registration and assemblage centers. In extension and contribution, the findings suggest that smallholder farmers can be part of the volatility solution when they are provided with rural roads and transportation to get their product to the market, and technology to receive and share the latest market information on prices. |
| Keywords: | Agricultural transformation agenda, recursive bivariate probit model, food price volatility, growth enhancement support scheme, rural farmers, Nigeria. |
| JEL: | O1 O55 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107241&r= |
| By: | Gu, Chris; Wang, Yike |
| Abstract: | Modern-day search platforms generally have two layers of information presentation. The outer layer displays the collection of search results with attributes selected by platforms, and consumers click on a product to reveal all its attributes in the inner layer. The information revealed in the outer layer affects the search costs and the probability of finding a match. To address the managerial question of optimal information layout, we create an information complexity measure of the outer layer, and study the consumer search process for information at the expense of time and cognitive costs. We first conduct online random experiments to show that consumers respond to and actively reduce cognitive cost for which our information complexity measure provides a representation. Then, using a unique and rich panel tracking consumer search behaviors at a large online travel agency (OTA), we find cognitive cost is a major component of search cost, while loading time cost has a much smaller share. By varying the information revealed in the outer layer, we find price revelation shifts search behavior most dramatically compared to the other product attributes. We propose information layouts that Pareto-improve both revenue and consumer welfare for our OTA. |
| Keywords: | online consumer research; cognitive modeling; information complexity; search intermediaries; platform design |
| JEL: | L81 |
| Date: | 2021–03–06 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:109871&r= |
| By: | David Winickoff (OECD); Laura Kreiling (OECD); Martin Borowiecki (OECD); Hermann Garden (OECD); James Philp (OECD) |
| Abstract: | Governments, together with partners in industry and civil society, are developing experimental forms of collaborative platforms to provide better linkages between research and innovation, and to promote the development and use of emerging technology. This report analyses 33 case studies from key fields of emerging technology – genomics, advanced materials and engineering biology – and finds that collaborative platforms are most effective when they act as “convergence spaces” for the fusion of diverse disciplines, actors and technology. It also shows how governance mechanisms shape platform operations and act as policy levers for ordering what amounts to a common pool resource: they aim to maximise tangible and intangible value, realise sustainability models, foment collaboration, and promote technological integration. After presenting cross-cutting and comparative findings on key components of governance, the report concludes with policy implications for the design of existing and future collaborative platforms. |
| Keywords: | advanced materials, biobanks, collaborative platforms, convergence space, engineering biology, genomics, governance, innovation policy, science and technology |
| Date: | 2021–04–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:stiaac:109-en&r= |
| By: | Acha-Anyi, Asongu; Acha-Anyi, Paul; Asongu, Simplice; Tchamyou, Vanessa |
| Abstract: | Health promotion is an educational tool that can be used to educate and create awareness of health issues through various media forms. The purpose of this study was to explore the use of social media (TB Proof South Africa‘s Facebook page) in creating tuberculosis (TB) awareness. A qualitative case study approach was used to collect data from TB Proof South Africa‘s Facebook page. An in-depth visual analysis of TB Proof South Africa’s Facebook page was carried out over a five-month period (from 1 February to 30 June 2017). The analysis of TB Proof South Africa‘s Facebook page was conducted in order to determine the use of social media for health promotion. Such a comprehensive analysis was aimed at determining if the visuals on this page create awareness on TB as an illness. Common themes were identified including, TB medication, TB patients and healthcare workers raising awareness on TB. The findings have potential implications for health promotion efforts using social media. |
| Keywords: | Health promotion, social media, facebook, tuberculosis (TB), health communication, TB Proof South Africa |
| JEL: | I00 L96 O55 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107239&r= |
| By: | Vladimir A. Karamychev; Jean-Marie Viaene |
| Abstract: | Mobile payments (m-payments) increase the accessibility of large segments of society to financial services while before the traditional banking system excluded these for lack of proof of identity and because of unsafe environments. This constitutes a key driver of new growth strategies of the developing world. Smartphones are essential to perform m-payments. In that regard, recent criticism from different sides has expressed the view that manufacturers’ strategies generate partial market coverage whereby the purchase of a phone and financial inclusion also remain out of reach for the group of poor consumers. Our aim in this paper is to examine the theoretical premises of this conjecture in a small open economy and uncover the conditions under which full market coverage is efficient and desirable. We analyze subgame perfect equilibria of a vertical duopoly model characterized by consumers’ taste for quality. The government uses taxes and/or subsidies to modify the market equilibrium. Given this, the following issues are considered: (a) What is the impact of different standards of payment security on the equilibrium number of low- and high-quality users? (b) What are the aggregate welfare gains of complete financial inclusion? (c) What happens if phone makers are foreign? |
| Keywords: | vertical duopoly, full market coverage, technical obsolescence, financial inclusion |
| JEL: | F23 G50 H31 H62 L13 L15 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_8995&r= |
| By: | David Bounie; Youssouf Camara; John W. Galbraith |
| Abstract: | The geographical pattern of consumers’ expenditures, whether made on-site or online, has implications for the location of economic activity and regional economic development. Data limitations have however limited our knowledge of this aspect of consumer behaviour. This paper uses transaction data to investigate such geographical patterns, and the impact of online commerce on these and on inter-regional retail trade linkages between cities and regions. We build original mobility and inter-regional retail trade measures from nearly 20 billion domestic consumer transactions made through bank cards, in France 2018-19. We find evidence that online consumer expenditure are more heavily concentrated in the already-large regional economies, relative to on-site expenditure, which suggests that the increasing movement toward online purchasing tend to increase the concentration of overall economic activity, and may have important implications for regional economic development. La répartition géographique des dépenses des consommateurs, qu'elles soient effectuées dans les commerces physiques ou en ligne, a des répercussions sur la localisation de l'activité économique et le développement économique régional. Le manque de données a toutefois limité notre connaissance de la répartition géographique des dépenses des consommateurs. Cet article utilise des données de transaction par carte bancaire pour étudier l'impact du commerce en ligne sur les comportements de dépense des consommateurs et sur les liens commerciaux entre les villes et les régions. Nous construisons des mesures originales de mobilité des consommateurs et de liens commerciaux entre villes et régions en utilisant près de 20 milliards de transactions par cartes bancaires en France sur la période 2018-19. Nous montrons que les dépenses de consommation en ligne par rapport à celles réalisées dans les commerces physiques sont plus fortement concentrées dans les économies régionales de taille importante, ce qui suggère que la croissance du commerce électronique tend à augmenter la concentration de l'activité économique globale, et peut avoir des implications importantes pour le développement économique régional. |
| Keywords: | Consumption Expenditure,Consumer Mobility,Inter-Regional Trade,Ecommerce, Dépenses de consommation,Mobilité des consommateurs,Commerce interrégional,Commerce électronique |
| Date: | 2021–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2021s-17&r= |
| By: | Asongu, Simplice; Uduji, Joseph; Okolo-Obasi, Elda |
| Abstract: | We investigate persistence and determinants of deaths from conflicts in a sample of 163 countries for the period 2010 to 2015. The empirical evidence is based on Generalised Method of Moments. First, the findings are contingent on income levels, religious-domination, landlockedness, regional proximity and legal origins. The persistence of deaths in internal conflict is more apparent in coastal, French civil-law and Islam-oriented countries, compared to landlocked, English common law, Christian-oriented countries, respectively. Second, the following factors are generally responsible for driving deaths from internal conflicts: homicides, conflict intensity and conflicts fought. Furthermore, incarcerations have negative effects on internal conflicts. Justifications for the established tendencies and policy implications are discussed. |
| Keywords: | War; Conflicts; Global evidence; Persistence |
| JEL: | H56 K42 L64 P50 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107240&r= |
| By: | Monteiro, Joseph; Prentice, Barry E. |
| Abstract: | The evolution of the motorized taxi industry in Vancouver is examined with respect to regulatory changes affecting competition. After initial laissez-faire policy, the industry was tightly regulated after 1946. As newer technologies emerged, newer types of services emerged and the demands of the public evolved. Vancouver remains one of the few large Canadian cities to resist increased competition. The protected taxi industry does not want changes pointing to congestion as a justification. The theory on externalities is examined with respect to congestion and information asymmetries. The paper document the most recent developments. |
| Keywords: | taxi regulation Vancouver competition |
| JEL: | R48 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107132&r=all |
| By: | Mauro Arcese (Bank of Italy); Domenico Di Giulio (Bank of Italy); Vitangelo Lasorella (Bank of Italy) |
| Abstract: | By leveraging the progress of information technology and computer networks, Real Time Gross Settlement systems (RTGS), which first appeared in the early 1990s, have quickly become the standard for the settlement of interbank payments in central bank money. However, the market of retail payments still relies on batch-based netting systems, as the huge volume of retail payments makes the architecture of a typical RTGS impractical in this context. The Eurosystem’s decision to provide a settlement service for instant payments has laid the foundation for the transformation of retail systems into real-time systems. A new design for settlement engines is needed, which should now be capable of settling an extremely high volume of payments in real time, while also operating continuously and exposing low transaction costs. This need has been the main driver for the design of the TIPS (Target Instant Payment Settlement) engine, a distributed, event-driven architecture based on principles of reactive applications and running on Linux/x86 commodity systems for cost efficiency. This paper shows how the traditional design of a mostly centralized, vertically scalable RTGS can be replaced by a distributed, horizontally scalable system, provided that the proper mix of parallel and sequential computation is used. |
| Keywords: | TIPS, RTGS, distributed systems |
| Date: | 2021–03 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wpmisp:mip_002_21&r= |
| By: | Frédéric Marty (Université Côte d'Azur, France; GREDEG CNRS) |
| Abstract: | This contribution deals with the application of competition rules in the digital sector and, in particular, the distortions that can result from self-preferencing strategies. In the context of the European Commission's Digital Markets Act project and the UK's plans to regulate the major digital ecosystems, the aim is to examine the relative effectiveness of the current effects-based approach stemming from competition law enforcement, the use of per-se rules, the implementation of specific regulation or the imposition of structural remedies to address such risks. It is a question of insisting on the objectives pursued (maximisation of consumer welfare, dynamic efficiency, contestability of market positions and fairness) and on the conditions for the implementation of hybrid approaches combining the logic of sectoral regulation and procedures rooted in the enforcement of competition rules. |
| Keywords: | Digital ecosystems, self-preferencing, exclusionary abuses, exploitative abuses, remedies |
| JEL: | L12 L41 L42 L86 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2021-20&r= |
| By: | Massimiliano Renzetti (Bank of Italy); Serena Bernardini (Bank of Italy); Giuseppe Marino (Bank of Italy); Luca Mibelli (Bank of Italy); Laura Ricciardi (Bank of Italy); Giovanni Maria Sabelli (Bank of Italy) |
| Abstract: | On 21 November 2017, the European Payments Council (EPC) introduced a new scheme for instant payments (SEPA Instant Credit Transfer- SCT Inst) in the Single Euro Payments Area (SEPA). The new scheme envisaged a maximum execution time of 10 seconds for the processing of each transaction and guaranteed service availability every day of the year, 24 hours a day. One year later, on 30 November 2018, Banca d’Italia – which had been commissioned by the Eurosystem to develop the system – delivered TIPS (TARGET Instant Payment Settlement), a new service for the settlement of instant payments in central bank money, which was also compliant with the SCT Inst scheme. Conceived as a multi-currency settlement platform, TIPS was developed with the aim, inter alia, of fostering the integration of retail payment services offered by the European financial community and of eliminating barriers due to lack of interoperability between different settlement platforms. The TIPS project is part of the Vision 2020 programme, which the Eurosystem has devised with the aim of providing new services to support financial markets, citizens, and businesses in Europe and to foster the innovation of market infrastructures and harmonization of financial services related to securities and cash. The Vision 2020 programme is part of the European Commission's Capital Markets Union project, aimed at achieving full integration of the European financial market. Building TIPS required the fulfilment of a number of particularly challenging technical requirements: virtually instant payment execution (with processing times per payment not exceeding 5 seconds); the capacity to handle a large volume of processed payments (over 43 million transactions per day); very high availability and resilience (reaching 99.9% service availability, and the capacity to restart within 15 minutes in a site disaster scenario); extreme scalability of the system from a performance viewpoint (the ability to sustain a doubling of the volume of payments over a year). About two years after the go-live, the number of payments settled in TIPS still falls short of these expectations and the potential of the service. However, albeit at different speeds in the various European countries, instant payment services are growing and it is reasonable to expect that this trend will only increase in the years to come. It is in this context that Banca d’Italia has already identified a series of actions that aim to prepare TIPS to become an essential component of the foreseeable spread of instant payment services in Europe. This paper is organized as follows: Chapters 1 and 2 illustrate the evolution of instant payment services in Europe and the fundamental principles of the TIPS service, respectively. Chapter 3 gives a detailed description of the TIPS system, outlining its functional perimeter (Section 3.1), presenting the technical characteristics of the platform on which it operates (Section 3.2), as well as the monitoring and management activities for the smooth operation of the service (Section 3.3). The governance of TIPS and the procedures for joining the service are then set out in Chapters 4 and 5. Finally, Chapter 6 outlines the main trends that Banca d’Italia, on the recommendation of the Eurosystem, has identified for TIPS for the years to come, both in terms of activities that are already in progress or being planned (Section 6.1), and with reference to other potential functionalities to be offered to the users in the near future (Section 6.2). |
| Keywords: | payment systems, instant payments, market infrastructures |
| JEL: | E42 |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wpmisp:mip_001_21&r= |
| By: | Keith E. Maskus; Alessandro Peri; Anna Rubinchik |
| Abstract: | Proceeds from illicit activities percolate into the legal economy through several channels. We exploit international regulations targeting money laundering via the financial sector to identify the flows of “dirty money” into legitimate establishments: business-based money laundering (BBML). Our variant of the monopolistic competition model embeds a drug cartel that channels illicit proceeds into an offshore financial investment and into BBML. Tighter regulations in one channel increase the flow in the other. We use a research design that links U.S. county business activity to the evolution of anti-money-laundering regulations in Caribbean jurisdictions to provide the first empirical evidence of the phenomenon. |
| Keywords: | money laundering, business establishment, Panama Papers, anti-money-laundering regulations, monopolistic competition |
| JEL: | F30 K40 G28 H00 D58 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9019&r= |
| By: | Luyao Zhang; Yulin Liu |
| Abstract: | Centralized monetary policy, leading to persistent inflation, is often inconsistent, untrustworthy, and unpredictable. Algorithmic stable coins enabled by blockchain technology are promising in solving this problem. Algorithmic stable coins utilize a monetary policy that is entirely rule-based. However, there is little understanding about how to optimize the rule. We propose a model that trade-offs between the price and supply stability. We further study the comparative statistics by varying several design features. Finally, we discuss the empirical implications and further research for industry applications. |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2104.07888&r= |
| By: | Ying Fan; Ge Zhang |
| Abstract: | Subsidies to consumers may cause firms to charge higher prices, which offsets consumer benefits from subsidies. We study a subsidy program design that mitigates such price increases by making products' eligibility for a subsidy dependent on firms' commitment to price ceilings. To quantify the importance of such competition for eligibility, we develop a structural model and an estimation procedure that accommodate binding pricing constraints. We find that competition for eligibility mitigates the price increases arising from the subsidy and even leads to a reduction in prices for some products. It improves consumer and total surpluses while limiting government subsidy payments. |
| JEL: | D4 H2 L1 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28659&r=all |
| By: | Angel Tengulov (Vanderbilt University - Finance); Franklin Allen (Imperial College London); Eric Nowak (Swiss Finance Institute; University of Lugano); Matteo Pirovano (Universita della Svizzera italiana (USI Lugano); Swiss Finance Institute) |
| Abstract: | At the end of January 2021, a group of stocks listed on US stock exchanges experienced sudden surges in their stock prices, which - coupled with high short interest – led to brief short squeeze episodes. We argue that these short squeezes were the result of coordinated trading by investors, who discussed their trading strategies on social news platforms. In addition, option markets played a central role in these events. Using hand-collected data we provide the first rigorous academic study of these short-squeezes and show that they significantly impeded market quality not only of the stocks at issue but also of their competitors. This evidence calls for tighter monitoring of social news platforms and a better understanding of the interlinkages between these platforms, derivatives markets and equity markets. |
| Keywords: | Limits to arbitrage; Short selling; Short squeeze; Gamma squeeze; Social news platforms |
| JEL: | G10 G12 G13 G14 G18 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp2131&r= |
| By: | Yuriy Gorodnichenko (University of California, Berkeley); Tho Pham (University of Reading); Oleksandr Talavera (University of Birmingham) |
| Abstract: | This study is a comprehensive analysis of the Federal Reserve System (FED) communication on social media and its effectiveness. Our examination shows that although the FED uses both Twitter and Facebook for public outreach, communication via Twitter is more popular and gains greater public engagement. There are heterogeneous effects across different topics of the FED's social media posts, post types, as well as across Twitter user groups. The general public is most active in engaging with the FED accounts, followed by media, investors, academics, and government accounts. Further investigation suggests inconclusive evidence of stock market reactions to the FED communication on social media. However, market participants do update their inflation expectations based on information contained in the FED's social media posts. |
| Keywords: | central bank communication, social media, public engagement, financial market. |
| JEL: | E50 E58 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:21-05&r= |
| By: | Sarah Xue Dong; Dewi Meisari; Banu Rinaldi |
| Abstract: | This paper presents the findings of a large scale randomized controlled field trial that informs micro and small businesses about a free and easy to use online registration portal for business registration. We find that in the context of Indonesia, a country with a large informal sector and complicated business registration process, simple online registration can be attractive to micro and small businesses. Sending three rounds of short WhatsApp or text messages resulted in 3.4% of recipients clicking the registration link in the messages. Only 0.1% of recipients registered through the portal, however, indicating that the registration portal is not easy enough to use. Different phrasing of messages results in different click rate, different registration rate, and different rates the sender’s number is blocked. Neutral message performs the best, followed by message that emphasize that registration is easy. Message that appeals to people’s patriotic feelings or message that emphasize the registration is free performs the last, depending on the outcome. |
| Keywords: | business registration; micro and small enterprises; informal sector; randomized controlled trial; behavioural insights; |
| JEL: | C93 O17 O29 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2021-05&r=all |
| By: | Chen, Jun; Ewens, Michael (California Institute of Technology) |
| Abstract: | Although an extensive literature shows that startups are financially constrained and that constraints vary by geography, the source of these constraints is still relatively unknown. We explore intermediary financing constraints, a channel studied in the banking literature, but only implicitly addressed in the venture capital (VC) literature. Our empirical setting is the VC fundraising and startup financing environment around the passage of the Volcker Rule, which restricted banks' ability to invest in venture capital funds as limited partners (LPs). The rule change disproportionately impacted regions of the U.S. historically lacking in VC financing. We find that a one standard deviation increase in VCs' exposure to the loss of banks as LPs led to an 18% decline in fund size and about a 10% decrease in the likelihood of raising a follow-on fund. Startups were not completely cushioned from the additional constraints on their VCs: capital raised fell and pre-money valuations declined. Overall, VC financing constraints manifest as fewer, smaller funds that change investment strategy and ex- perience increases in bargaining power. Last, we show that the rule change increased the likelihood startups moved out of impacted states, thus exacerbating the geographic disparity in high-growth entrepreneurship. |
| Date: | 2021–04–11 |
| URL: | http://d.repec.org/n?u=RePEc:osf:socarx:8tpux&r= |
| By: | Alejandro Norton; Marcos Herrera-Gomez |
| Abstract: | Usando información de hospedajes de Airbnb en la Ciudad de Buenos Aires, este trabajo analiza la relación entre las actividades delictivas y los precios de alquiler. El trabajo plantea un modelo hedónico que permite estimar el impacto de daño del delito controlando por otros factores (características del alojamiento y variables contextuales). Los principales aportes del trabajo pueden ser resumidos en tres partes. En primer lugar, se utiliza información geográfica para construir un indicador de daño del delito que pondera los tipos de delitos con respecto al daño producido por los mismos. En segundo lugar, el estudio reconoce el problema de la endogeneidad del delito y provee evidencia robusta sobre el impacto del delito en precios de Airbnb. En tercer lugar, el modelo principal incluye una corrección por dependencia espacial endógena en precios y por heteroscedasticidad espacial en el término de error. Nuestros resultados indican que los precios de los alojamientos son afectados negativamente por la actividad delictiva en el vecindario. |
| Keywords: | Precios Airbnb, Índice de Daño del Delito, Modelo Hedónico Espacial |
| JEL: | Z30 C21 R32 K14 |
| Date: | 2020–11 |
| URL: | http://d.repec.org/n?u=RePEc:aep:anales:4358&r=all |
| By: | Asongu, Simplice; Nnanna, Joseph |
| Abstract: | This study unites two streams of research by simultaneously focusing on the impact of financial globalisation on financial development and pre- and post-crisis dynamics of the investigated relationship. The empirical evidence is based on 53 African countries for the period 2004-2011 and Generalised Method of Moments. The following findings are established. First, whereas marginal effects from financial globalisation are positive on financial dynamics of activity and size, corresponding net effects (positive thresholds) are negative (within range). Second, while decreasing financial globalisation returns are apparent to financial dynamics of depth and efficiency, corresponding net effects (negative thresholds) are positive (not within range). Third, financial development dynamics are more weakly stationary and strongly convergent in the pre-crisis period. Fourth, the net effect from the: pre-crisis period is lower on money supply and banking system efficiency; post-crisis period is positive on financial system efficiency and pre-crisis period is positive on financial size. |
| Keywords: | Banking; Financial crisis; Financial development |
| JEL: | F02 F21 F30 F40 O10 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107104&r=all |