nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2021‒10‒18
35 papers chosen by

  1. Central bank digital currency in Nigeria: opportunities and risks By Ozili, Peterson K
  2. Law, mobile money drivers and mobile money innovations in developing countries By Asongu, Simplice; Agyemang-Mintah, Peter; Nting, Rexon
  3. Mobile technology supply factors and mobile money innovation: Thresholds for complementary policies By Asongu, Simplice; Odhiambo, Nicholas
  4. China’s Transition to a Digital Currency: Does It Threaten Dollarization? By Aysan, Ahmet Faruk; Kayani, Farrukh Nawaz
  5. A Brief Comparison of Most Prominent Crowdfunding Platforms in Turkey and USA By Uzuntepe, Beren
  6. Bitcoin and traditional currencies during the Covid-19 pandemic period By Chu, Meifen
  7. There and Back Again: The Making of Uganda’s Mobile Money Tax By Lees, Adrienne; Akol, Doris
  8. Exploring the conjunction between the structures of deposit and credit markets in the digital economy under information asymmetry By Elena Deryugina; Alexey Ponomarenko; Andrey Sinyakov
  9. Monopoly Capitalism in the Digital Era By Andrea Coveri; Claudio Cozza; Dario Guarascio
  10. Sustainability, Trust and Blockchain Applications: Best Practices and Fintech Prospects By Aysan, Ahmet Faruk; Bergigui, Fouad
  11. Banks’ consumer lending reaction to fintech and bigtech credit emergence in the context of soft versus hard credit information processing By Kowalewski; Pawel Pisany
  12. Addressing the Challenges of Taxation of the Digital Economy: Lessons for African Countries By Rukundo, Solomon
  13. Toward Cleaner Production: Can Mobile Phone Technology Help Reduce Inorganic Fertilizer Application? Evidence Using a National Level Dataset By Nawab Khan; Ram L. Ray; Hazem S. Kassem; Muhammad Ihtisham; Abdullah; Simplice Asongu; Stephen Ansah; Shemei Zhang
  14. A tale of paper and gold: the material history money in South Africa By Feingold, Ellen; Fourie, Johan; Gardner, Leigh
  15. Hotel Preference Rank based on Online Customer Review By Muhammad Apriandito Arya Saputra; Andry Alamsyah; Fajar Ibnu Fatihan
  16. Productivity opportunities and risks in a transformative,low-carbon and digital age By Frank W. Geels; Jonatan Pinkse; Dimitri Zenghelis
  17. Exclusive contracts and multihoming agents in two-sided markets By Saruta, Fuyuki
  18. Digital finance, green finance and social finance: is there a link? By Ozili, Peterson K
  19. The Challenge of Digital Transformation By Nicolas van Zeebroeck; Jacques Bughin
  20. Bitcoin-specific fear sentiment and bitcoin returns in the COVID-19 outbreak By Aysan, Ahmet Faruk; Polat, Ali Yavuz; Tekin, Hasan; Tunali, Ahmet Semih
  21. Protecting Retail Investors from Order Book Spoofing using a GRU-based Detection Model By Jean-No\"el Tuccella; Philip Nadler; Ovidiu \c{S}erban
  22. Exploring the Endogenous Nature of Meme Stocks Using the Log-Periodic Power Law Model and Confidence Indicator By Hideyuki Takagi
  23. COVID-19: Online Fashion Purchase Intention among Millennials By Sook Fern Yeo
  24. Inferring supply networks from mobile phone data to estimate the resilience of a national economy By Tobias Reisch; Georg Heiler; Christian Diem; Stefan Thurner
  25. How can digital tools support Agricultural Value Chain Finance? Applications from Latin America By Villalba, Roberto; Venus, Terese; Sauer, Johannes
  26. ICTs, data and vulnerable people: a guide for citizens By Castańeda, Alexandra; Matheus, Andreas; Klimczuk, Andrzej; Berti Suman, Anna; Duerinckx, Annelies; Pavlakis, Christoforos; Baibarac-Duignan, Corelia; Broglio, Elisabetta; Caruso, Federico; Thuermer, Gefion; Feord, Helen; Asine, Janice; Piera, Jaume; Soacha, Karen; Zourou, Katerina; Wagenknecht, Katherin; Vohland, Katrin; Freyburg, Linda; Leppée, Marcel; Camara Oliveira, Marta; Sterken, Mieke; Woods, Tim
  27. Online Vacancies and its Role in Labor Market Performance By Leonardo Fabio Morales; Carlos Ospino; Nicole Amaral
  28. A Note on Jain´s Digital Piracy Model: Horizontal vs Vertical Product Differentiation By Michael Kunin; Kresimir Zigic
  29. The Taxation of the Digitalised Economy: An African Study By Ndajiwo, Mustapha
  30. The Collaborative Economy in Action: Context and Outline of Country Reports By Klimczuk, Andrzej; Česnuityte, Vida; Avram, Gabriela
  31. Determinants of Price Discrimination and Switching Mortgage Provider in Times of Regulation and Digitalization By Steven Ongena; Florentina Paraschiv; Endre J Reite
  32. Cybersecurity and the Federal Reserve By Loretta J. Mester
  33. Where do angry birds tweet? Income inequality and online hate in Italy By Denti, Daria; Faggian, Alessandra
  34. Financial Inclusion and Gender Inequality in sub-Saharan Africa By Tendai Zawaira; Matthew Clance; Carolyn Chisadza; Rangan Gupta
  35. The Rise of a New Anchor Currency in RCEP? A Tale of Three Currencies By Guo, Dong; Zhou, Peng

  1. By: Ozili, Peterson K
    Abstract: This paper discussed the opportunities and risks of central bank digital currency (CBDC) in Nigeria, also known as the eNaira or e-Naira. The opportunities which CBDC present to Nigeria include, improved monetary policy transmission, efficient payments and increased financial inclusion. Some of the identified risks include rising digital illiteracy, increased propensity for cyber-attacks, data theft, and the uncertain role of banks in a full-fledged CBDC economy. This article contributes to the literature by evaluating the pros and cons of fiat digital currency such as a central bank digital currency.
    Keywords: central bank digital currency, eNaira, blockchain, cryptocurrency, central bank, CBDC, bitcoin, payment system, fiat digital currency, distributed ledger, Nigeria.
    JEL: E51 E52 E58 E59 G18 G21
    Date: 2021–10–02
  2. By: Asongu, Simplice; Agyemang-Mintah, Peter; Nting, Rexon
    Abstract: This study investigates how the rule of law (i.e. law) modulates demand- and supply-side drivers of mobile money to influence mobile money innovations (i.e. mobile money accounts, the mobile phone used to send money and the mobile phone used to receive money) in developing countries. The following findings from Tobit regressions are established. First, from the demand-side linkages, law modulates: (i) bank accounts and automated teller machine (ATM) penetration for negative interactive relationships with mobile money innovations and (ii) bank sector concentration for a positive interactive relationship with mobile money accounts. Second, from supply-side linkages, law interacts with: (i) mobile subscriptions for a negative relationship with the mobile phone used to send money; (ii) mobile connectivity coverage for a negative nexus on the mobile phone used to receive money and (iii) mobile connectivity performance for a negative influence on the mobile phone used to send/receive money. Policy implications are discussed in the light of enhancing the rule of law as well as improving mobile phone subscription, connectivity and performance dynamics.
    Keywords: Mobile money; technology diffusion; financial inclusion; inclusive innovation
    JEL: D10 D14 D31 D60 O30
    Date: 2021–01
  3. By: Asongu, Simplice; Odhiambo, Nicholas
    Abstract: This study complements the extant literature by assessing how enhancing supply factors of mobile technologies affect mobile money innovations for financial inclusion in developing countries. The mobile money innovation outcome variables are: mobile money accounts, the mobile phone used to send money and the mobile phone used to receive money. The mobile technology supply factors are: unique mobile subscription rate, mobile connectivity performance, mobile connectivity coverage and telecommunications (telecom) sector regulation. The empirical evidence is based on quadratic Tobit regressions and the following findings are established. There are Kuznets or inverted shaped nexuses between three of the four supply factors and mobile money innovations from which thresholds for complementary policies are provided as follows: (i) Unique adults’ mobile subscription rates of 128.500%, 121.500% and 77.750% for mobile money accounts, the mobile used to send money and the mobile used to receive money, respectively; (ii) the average share of the population covered by 2G, 3G and 4G mobile data networks of 61.250% and 51.833% for the mobile used to send money and the mobile used to receive money, respectively; and (iii) a telecom sector regulation index of 0.409, 0.283 and 0.283 for mobile money accounts, the mobile phone used to send money and the mobile phone used to receive money, respectively. Some complementary policies are discussed, because at the attendant thresholds, the engaged supply factors of mobile money technologies become necessary, but not sufficient conditions of mobile money innovations for financial inclusion.
    Keywords: Mobile money; technology diffusion; financial inclusion; inclusive innovation
    JEL: D10 D14 D31 D60 O30
    Date: 2021–01
  4. By: Aysan, Ahmet Faruk; Kayani, Farrukh Nawaz
    Abstract: This article provides a detailed introduction to China’s launching of a digital currency. We conduct a comparative analysis concerning whether digital currency is a more stable and reliable currency than cryptocurrency and investigate whether a digital renminbi (or yuan) could replace the US dollar as a medium of exchange in international transactions. China has gained a first-mover advantage by rolling out a central bank digital currency (CBDC). But the outcome will depend on the US response as well as the future evolution of the US and Chinese economies. Most other articles on this topic focus on domestic use of the Chinese CBDC. But this study is unique in analyzing the prospects of a digital renminbi as a replacement for the US dollar in international commerce.
    Keywords: China, cryptocurrency, digital yuan, People’s Bank of China, US.
    JEL: F50
    Date: 2021–05–06
  5. By: Uzuntepe, Beren
    Abstract: Emerging and gaining significance due to the widespread use of the Internet and the power of social media, crowdfunding, via crowdfunding platforms, provides entrepreneurs with creative business ideas with the opportunity to reach extensive masses and to be able to directly access the financial resources that their projects require. Even though the interest in crowdfunding rises, the literature seems to lack enough research about these platforms. Addressing the platforms that bring together the entrepreneurs and the backers, this research aims to compare the reward-based crowdfunding platforms operating in Turkey with the international crowdfunding platforms. Containing the categories of technology and movie/video, this research discusses the differences between the most prominent crowdfunding platforms in the two countries. The findings of the research constitute importance due to the fact that it shows the way to the entrepreneurs, crowdfunding platforms, and backers while making their decisions, encourages participation in the campaigns, and sheds light on other studies about the subject.
    Keywords: Keywords: Crowdfunding, Entrepreneurial Finance, Online Platform, Reward Based Crowdfunding, KIA
    JEL: G2 G24 G3 G32 L2 L26 M1 M13 O3 O30 O34 P3 P34 P35
    Date: 2021
  6. By: Chu, Meifen
    Abstract: The objective of this study is to examine the movement of Bitcoin and the traditional currencies (USD, EURO, GBP and CNY) and the Bitcoin’s hedging of the traditional currencies. First, this paper observes the Bitcoin and four traditional currency exchange series: the USD, EURO, GBP and CNY. Second, it examines the fluctuation patterns of each series by using wavelet transform analysis, Third, a wavelet coherence analysis is applied to examine the interdependence between the Bitcoin and the four traditional currencies. The phase pattern analysis results indicate that the Bitcoin may not act as a hedging currency to replace the traditional currencies during the Covid-19 crisis. Another interesting result shows the rapid increasing number of the World Covid-19 Deaths (CovidDeaths) may not be the critical reason for the hyper price of the Bitcoin. The massive quantitative easing (QE) may be considered as the key reason for the soar-up of the Bitcoin price.
    Keywords: Bitcoin, Traditional currencies, Covid-19, CovidDeaths, Hedging feature, Wavelet Analysis
    JEL: C1
    Date: 2021–04–05
  7. By: Lees, Adrienne; Akol, Doris
    Abstract: Mobile money is widely seen as a powerful tool for enhancing financial inclusion and, potentially, improving the economic well-being of the poor. As the mobile money sector, and its turnover, have grown, certain governments have increasingly viewed mobile money transactions as a potentially convenient tax handle. The resulting tax measures are often controversial and draw sharp criticism from those who fear that they will undermine the growth of digital financial services. The case study of Uganda highlights an interesting example of this trend and demonstrates the importance of careful tax policy design. In early 2018, there was a consensus that Uganda’s tax effort remained some way below its revenue potential, and there was pressure to find new revenue sources. In July 2018, the government introduced an especially contentious new tax of 1 per cent on the value of all mobile money transactions, one of several excise duty amendments designed to increase revenue from the telecommunications and financial sectors. After widespread public outcry and significant implementation challenges, the tax was amended in November 2018 to apply only to mobile money withdrawals at a rate of 0.5 per cent.
    Keywords: Finance,
    Date: 2021
  8. By: Elena Deryugina (Bank of Russia, Russian Federation); Alexey Ponomarenko (Bank of Russia, Russian Federation); Andrey Sinyakov (Bank of Russia, Russian Federation)
    Abstract: In the digital economy, customer data becomes particularly valuable. Customer transactions monitored by banks, payment systems, and retail platforms are a useful source of information to assess potential borrowers’ credit risk. Thus, a dominant player at a payment or deposit market, behaving strategically, may influence the characteristics of the lending market. In this article, we show, within the game-theoretic framework, that such dominance can affect the market structure, loan pricing, financial inclusion, and credit risk accumulated on banks’ balance sheets. Our results show that specifics of the digital economy set a new link between structures of deposit and credit markets. Information asymmetries allow the dominant player to increase its profits at the expense of the profits gained by other players. At the same time, the accessibility of loans to more risky borrowers reduces while credit risks of banks’ loan portfolios decline.
    Keywords: retail payments, banking, market structure, asymmetric information, customer data
    JEL: D43 D82 G21
    Date: 2021–09
  9. By: Andrea Coveri; Claudio Cozza; Dario Guarascio
    Abstract: The paper applies the radical view of Monopoly Capitalism to the digital platform economy. Based on the seminal ideas of Hymer and Zeitlin that led Cowling and Sugden to define the large monopolistic firm as a means to plan production from a unique centre of strategic decision-making, we attempt to develop a framework where digital platforms are conceived as an evolution of large transnational corporations. Power and control in our Monopoly Capitalism view are then meant not only in terms of market relations, but rather as levers for coordinating global production and influencing world societies. Applying this framework to the Amazon case, we highlight the key analytical dimensions to be considered: not only Amazon dominates other firms and suppliers through its diversification and a direct control of data and technology; its power is also linked to global labour fragmentation and uneven bargaining power vis-à-vis world governments, as in the Hymer and Cowling's tradition.
    Keywords: Monopoly Capital; Monopoly Power; Digital Platforms; Amazon; Multinational corporation.
    Date: 2021–10–06
  10. By: Aysan, Ahmet Faruk; Bergigui, Fouad
    Abstract: Since the adoption of the SDGs in 2015, it has been a 5-year journey of trial and error experimentations all over the world to come up with innovative solutions beyond business-as-usual and get the job done. In this paper, we assess blockchain-backed solutions beyond the hype. While the technology has a promising potential to trigger disruptive innovations to fulfill the SGDs, it is not mature yet with many gaps in terms of approaches and tools to develop blockchain use cases, monitor and evaluate blockchain experiments, mitigate associated risks and ethical considerations while managing changes within organizations leading blockchain-powered platforms. It is only by filing these gaps that blockchain can deliver its promises and may be effectively used as an SDG accelerator. Islamic finance can play a key role in shaping the transition towards a more circular economy. One promising way of doing so, is by scaling-up the use of blockchain-enabled solutions in the practices of circular economy and Islamic finance. As the technology is still getting mature, more innovative and applied research is needed to capitalize on the lessons learned within various geographies and across a wide range of economic, social, and environmental spectrums.
    Keywords: Blockchain, SDGs, innovation, Islamic finance, circular economy
    JEL: O3 O31
    Date: 2021–05–05
  11. By: Kowalewski (IESEG School of Management, UMR 9221 - LEM - Lille Economie Management, Lille, France Univ. Lille, UMR 9221 - LEM - Lille Economie Management, Lille, France CNRS, UMR 9221 - LEM - Lille Economie Management, Lille, France Institute of Economics, Polish Academy of Sciences, Warsaw, Poland); Pawel Pisany (Institute of Economics, Polish Academy of Sciences, Warsaw, Poland)
    Abstract: We analyze competition in the consumer lending segment between banks and financial technology (or “fintech”) companies (or “fintechs”) as well as giant technology (or “bigtech”) companies (or “bigtechs”) providing alternative credit. We use a database combining bank-level characteristics and country-level proxies for 72 countries during 2013–2018. We find that in developed markets, the relations between fintech/bigtech credit providers and banks are similar and competitive in nature. However, banks’ consumer lending grows simultaneously with fintech credit market development in emerging economies but decreases in the aftermath of bigtech credit emergence. Fintech credit seems to penetrate market segments not serviced by banks; thus, it plays a complementary role, but only in emerging economies. Bigtechs compete even more with banks and push some banking offers out of the market, both in emerging and developed economies. Furthermore, we show that domestic and privately owned banks are more negatively affected by competition from technology-based lending, particularly bigtech, compared to foreign banks. Thus, bigtech lending may be treated as a serious competition for banks’ relationship lending, based on soft credit information processing, provisioned traditionally by local banks.
    Keywords: alternative credit, fintech, bigtech, financial inclusion, local banks, competition, relationship lending, soft credit information
    JEL: G21 G23 O33
    Date: 2021–10
  12. By: Rukundo, Solomon
    Abstract: The rapid growth of the digital economy in many African countries poses serious challenges to traditional tax regimes. Revenue authorities must protect their revenue base without hindering the development and use of new technologies or the business community’s involvement in the e-marketplace. Two international taxation rules pose a challenge to taxing the global digital economy. The permanent establishment (PE) rule allocates taxing rights to a country where a digital multinational enterprise (MNE) creates a sufficient physical presence, and the profit allocation rule, based on the arm’s length principle (ALP), allocates profits based on value created. Both envisage a bricks-and-mortar business environment aligning taxing rights with the location of economic activities. Digital MNEs, however, can operate with only a web presence and use multisided business models to gain value from externalities generated by free products, challenging notions of where and how value is created.
    Keywords: Economic Development,
    Date: 2020
  13. By: Nawab Khan (Sichuan Agricultural University,Sichuan, China); Ram L. Ray (Prairie View A&M University, Prairie View, USA); Hazem S. Kassem (King Saud University, Riyadh, Saudi Arabia); Muhammad Ihtisham (Huazhong Agricultural University, Wuhan, China); Abdullah (PMAS-Arid Agriculture University, Pakistan); Simplice Asongu (Yaoundé, Cameroon); Stephen Ansah (Sichuan Agricultural University, China); Shemei Zhang (Sichuan Agricultural University, China)
    Abstract: Increasing agricultural production and optimizing inorganic fertilizer (IF) use are imperative for agricultural and environmental sustainability. Mobile phone usage (MPU) has the potential to reduce IF application while ensuring environmental and agricultural sustainability goals. The main objectives of this study were to assess MPU, mobile phone promotion policy, and whether the mediation role of human capital can help reduce IF use. This study used baseline regression analysis and propensity score matching, difference-in-differences (PSM-DID) to assess the impact of MPU on IF usage. However, the two-stage instrumental variables method (IVM) was used to study the effects of mobile phone promotion policy on IF usage. This study used a national dataset from 7,987 rural households in Afghanistan to investigate the impacts of MPU and associated promotion policies on IF application. The baseline regression outcomes showed that the MPU significantly reduced IF usage. The evaluation mechanism revealed that mobile phones help reduce IF application by improving the human capital of farmers. Besides, evidence from the DID technique showed that mobile phone promotion policies lowered IF application. These results remained robust after applying the PSM-DID method and two-stage IVM to control endogenous decisions of rural households. This study results imply that enhancing the accessibility of wideband in remote areas, promoting MPU, and increasing investment in information communication technologies (ICTs) infrastructure can help decrease the IF application in agriculture. Thus, the government should invest in remote areas to facilitate access to ICTs, such as having a telephone and access to a cellular and internet network to provide an environment and facility to apply IF effectively. Further, particular policy support must focus on how vulnerable populations access the internet and mobile phone technologies.
    Keywords: mobile phone usage; propensity score matching; difference-in-difference; inorganic fertilizer usage; human capital; sustainable development; Afghanistan
    Date: 2021–01
  14. By: Feingold, Ellen; Fourie, Johan; Gardner, Leigh
    Abstract: This paper uses the South African objects in the National Numismatic Collection of the Smithsonian to tell a new material history of money in South Africa. In other parts of the continent, research about the currencies in use and how these changed over time have offered a new perspective on the impact of colonialism, commercialisation, and the rise of state capacity. South Africa, and southern Africa more generally, has remained on the periphery of these debates. This paper begins to fill this gap. It shows that even in Africa’s most financially developed region, the process of establishing a stable national currency was long and halting, reflecting struggles over South Africa’s relationship with the global economy and the rise and fall of apartheid.
    Keywords: South Africa; currency; colonialism; mineral; REF Impact Fund
    JEL: N47 N17
    Date: 2021–01
  15. By: Muhammad Apriandito Arya Saputra; Andry Alamsyah; Fajar Ibnu Fatihan
    Abstract: Topline hotels are now shifting into the digital way in how they understand their customers to maintain and ensuring satisfaction. Rather than the conventional way which uses written reviews or interviews, the hotel is now heavily investing in Artificial Intelligence particularly Machine Learning solutions. Analysis of online customer reviews changes the way companies make decisions in a more effective way than using conventional analysis. The purpose of this research is to measure hotel service quality. The proposed approach emphasizes service quality dimensions reviews of the top-5 luxury hotel in Indonesia that appear on the online travel site TripAdvisor based on section Best of 2018. In this research, we use a model based on a simple Bayesian classifier to classify each customer review into one of the service quality dimensions. Our model was able to separate each classification properly by accuracy, kappa, recall, precision, and F-measure measurements. To uncover latent topics in the customer's opinion we use Topic Modeling. We found that the common issue that occurs is about responsiveness as it got the lowest percentage compared to others. Our research provides a faster outlook of hotel rank based on service quality to end customers based on a summary of the previous online review.
    Date: 2021–10
  16. By: Frank W. Geels (Manchester Institute of Innovation Research, The Productivity Institute; Alliance Manchester Business School The University of Manchester); Jonatan Pinkse (Manchester Institute of Innovation Research, The Productivity Institute; Alliance Manchester Business School The University of Manchester); Dimitri Zenghelis (University of Cambridge)
    Keywords: productivity, low-carbon, digital transitions
    Date: 2021–09
  17. By: Saruta, Fuyuki
    Abstract: We investigate a two-sided market model in which two platforms compete for sellers and buyers who can participate in multiple platforms (multihoming), and one of the two platforms can make exclusive contracts with sellers. The platform faces a trade-off when it enters into exclusivity agreements with sellers, which gives it an advantage when competing for buyers but reduces its revenue from the seller side. In addition, we expect that the existence of multihoming buyers weakens the platform's incentive to have an exclusive contract with sellers. Even when buyers can multihome, does a platform have an incentive to make exclusive contracts with sellers? If so, how does exclusive dealing affect social welfare? We obtain the following results. First, in equilibrium, the platform makes exclusive contracts with all sellers or not at all. If sellers' network externality on buyers is sufficiently large (small), it chooses fully exclusive dealing (nonexclusive dealing). Second, exclusive dealing is preferable (detrimental) to social welfare when the network externality is sufficiently large (small). Exclusive dealing encourages the multihoming of buyers, which allows agents to have more interactions on one platform and prompts more buyers to obtain stand-alone benefits from multiple platforms.
    Keywords: Exclusive contracts; Two-sided markets; Multihoming; Platform competition.
    JEL: D43 D62 L13 L14
    Date: 2021–10
  18. By: Ozili, Peterson K
    Abstract: Identifying the intersection between digital finance, green finance and social finance is important for promoting sustainable financial, social and environmental development. This paper suggests a link between digital finance, green finance and social finance. Using a simple conceptual model, I show that digital finance offers a smooth, efficient and seamless channel for individuals and corporations to fund social projects that deliver a social dividend, and green projects that promote a sustainable environment. The implication is that digital finance is both an enabler and a channel for efficient green financing and social financing.
    Keywords: green finance, social finance, digital finance, sustainable development, environment, sustainable finance, innovation
    JEL: G02 G20 G21 Q56
    Date: 2021
  19. By: Nicolas van Zeebroeck; Jacques Bughin
    Date: 2021–09–30
  20. By: Aysan, Ahmet Faruk; Polat, Ali Yavuz; Tekin, Hasan; Tunali, Ahmet Semih
    Abstract: This study aims to investigate the effect of fear sentiment with a novel data set on Bitcoin’s return, volatility and transaction volume. We divide the sample into two subperiods in order to capture the changing dynamics during the Covid-19 pandemic. We retrieve the novel fear sentiment data from Thomson Reuters MarketPsych Indices (TRMI). We denote the subperiods as pre- and post-COVID19 considering January 13th, 2020, when first Covid-19 confirmed case was reported outside China. We employ bivariate vector autoregressive (VAR) models given below with lag-length k, to investigate the dynamics between Bitcoin variables and fear sentiment.Bitcoin market measures have dissimilar dynamics before and after the Coronavirus outbreak. The results reveal that due to the excessive uncertainty led by the outbreak, an increase in fear sentiment negatively affects the Bitcoin returns more persistently and significantly. For the post-COVID-19 period, an increase in fear also results in more fluctuations in transaction volume while its initial and cumulative effects are both negative. Due to extreme uncertainty caused by the COVID-19 pandemic, investors may trade more aggressively in the initial phases of the shock.
    Keywords: Bitcoin’s return, COVID-19, fear sentiment, transaction volume, TRMI, volatility
    JEL: O31
    Date: 2021–05–05
  21. By: Jean-No\"el Tuccella; Philip Nadler; Ovidiu \c{S}erban
    Abstract: Market manipulation is tackled through regulation in traditional markets because of its detrimental effect on market efficiency and many participating financial actors. The recent increase of private retail investors due to new low-fee platforms and new asset classes such as decentralised digital currencies has increased the number of vulnerable actors due to lack of institutional sophistication and strong regulation. This paper proposes a method to detect illicit activity and inform investors on spoofing attempts, a well-known market manipulation technique. Our framework is based on a highly extendable Gated Recurrent Unit (GRU) model and allows the inclusion of market variables that can explain spoofing and potentially other illicit activities. The model is tested on granular order book data, in one of the most unregulated markets prone to spoofing with a large number of non-institutional traders. The results show that the model is performing well in an early detection context, allowing the identification of spoofing attempts soon enough to allow investors to react. This is the first step to a fully comprehensive model that will protect investors in various unregulated trading environments and regulators to identify illicit activity.
    Date: 2021–10
  22. By: Hideyuki Takagi
    Abstract: This study examined the endogenous nature of negative bubbles forming in meme stocks with the Log-Periodic Power Law (LPPL) Confidence Indicator (CI). A meme stock is a stock that has gained a significant amount of attention on a large social media platform such as Yahoo! or Reddit. This study examined four meme stocks including Tesla, Inc. (TSLA), GameStop Corp. (GME), Koss Corporation (KOSS), and AMC Entertainment Holdings Inc (AMC). The CI was able to detect numerous bubbles forming in meme stocks, but had difficulty in significantly predicting social media-induced exogenous rallies. This may have been due to price movements affected by external causes such as short squeezes. However, the model did provide proof for the formation of previous bubbles that could have been a catalyst for the meme stocks rallies. This study outlines the real unpredictability of many black-swan events, and further studies could be done examining exogenous bubbles.
    Date: 2021–10
  23. By: Sook Fern Yeo (Faculty of Business, Multimedia University, Melaka, Malaysia Author-2-Name: Kah Boon Lim Author-2-Workplace-Name: "Faculty of Business, Multimedia University, Melaka, Malaysia " Author-3-Name: Yiin Chii Ong Author-3-Workplace-Name: Faculty of Business, Multimedia University, Melaka, Malaysia Author-4-Name: Cheng Ling Tan Author-4-Workplace-Name: Graduate School of Business, Universiti Sains Malaysia, Penang, Malaysia Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: "Objective - The global spread of coronavirus disease (COVID-19) has caused a negative impact on the global economy. Customers' purchasing habits are also shifting from traditional store visits to online store purchases. Millennials or Generation Y constitute a large proportion of consumers across the global digital space. Hence, the main objective of this study is to examine the purchase intention of millennials towards online fashion stores during COVID-19 pandemic. Methodology/Technique - A set of self-administered questionnaires has been distributed to 230 respondents which age range from 20 years old to 40 years old in three states of Malaysia which are Johor, Melaka, and Selangor. The five independent variables which are fashion innovativeness, perceived security, perceived value, information quality and cost saving have been tested on their relationship towards the dependent variable which is purchasing intention towards online fashion. The collected data were keyed into SPSS version 25 and followed by using Partial Least Square Structural Equation Modelling (PLS-SEM 3.3.3) to assess the hypothesis. Findings - The research findings indicated that the key factors of fashion innovativeness, information quality and cost saving which have significant relationship towards the millennials' purchase intention from online fashion stores during COVID-19 pandemic. Novelty - To the authors' knowledge, this is the first methodological study which include the five independent variables to examine millennial's purchasing intention towards online fashion during the COVID-19 pandemic. The findings of this research will help e-retailers of online fashion stores understand the factors that influence millennials' purchase intentions. Type of Paper - Empirical."
    JEL: M30 M31
    Date: 2021–09–30
  24. By: Tobias Reisch; Georg Heiler; Christian Diem; Stefan Thurner
    Abstract: National economies rest on networks of millions of customer-supplier relations. Some companies -- in the case of their default -- can trigger significant cascades of shock in the supply-chain network and are thus systemically risky. Up to now, systemic risk of individual companies was practically not quantifiable, due to the unavailability of firm-level transaction data. So far, economic shocks are typically studied in the framework of input-output analysis on the industry-level that can't relate risk to individual firms. Exact firm-level supply networks based on tax or payment data exist only for very few countries. Here we explore to what extent telecommunication data can be used as an inexpensive, easily available, and real-time alternative to reconstruct national supply networks on the firm-level. We find that the conditional probability of correctly identifying a true customer-supplier link -- given a communication link exists -- is about 90%. This quality level allows us to reliably estimate a systemic risk profile of an entire country that serves as a proxy for the resilience of its economy. In particular, we are able to identify the high systemic risk companies. We find that 65 firms have the potential to trigger large cascades of disruption in production chains that could cause severe damages in the economy. We verify that the topological features of the inter-firm communication network are highly similar to national production networks with exact firm-level interactions.
    Date: 2021–10
  25. By: Villalba, Roberto; Venus, Terese; Sauer, Johannes
    Keywords: Agricultural Finance, Marketing, Community/Rural/Urban Development
    Date: 2021–08
  26. By: Castańeda, Alexandra; Matheus, Andreas; Klimczuk, Andrzej; Berti Suman, Anna; Duerinckx, Annelies; Pavlakis, Christoforos; Baibarac-Duignan, Corelia; Broglio, Elisabetta; Caruso, Federico; Thuermer, Gefion; Feord, Helen; Asine, Janice; Piera, Jaume; Soacha, Karen; Zourou, Katerina; Wagenknecht, Katherin; Vohland, Katrin; Freyburg, Linda; Leppée, Marcel; Camara Oliveira, Marta; Sterken, Mieke; Woods, Tim
    Abstract: ICTs, personal data, digital rights, the GDPR, data privacy, online security… these terms, and the concepts behind them, are increasingly common in our lives. Some of us may be familiar with them, but others are less aware of the growing role of ICTs and data in our lives - and the potential risks this creates. These risks are even more pronounced for vulnerable groups in society. People can be vulnerable in different, often overlapping, ways, which place them at a disadvantage to the majority of citizens; Table 3 in this guide presents some of the many forms and causes of vulnerability. As a result, vulnerable people need greater support to navigate the digital world, and to ensure that they are able to exercise their rights. This guide explains where such support can be found, and also answers the following questions: - What are the main ethical and legal issues around ICTs for vulnerable citizens? - Who is vulnerable in Europe? - How do issues around ICTs affect vulnerable people in particular? This guide is a resource for members of vulnerable groups, people who work with vulnerable groups, and citizens more broadly. It is also useful for data controllers1 who collect data about vulnerable citizens. While focused on citizens in Europe, it may be of interest to people in other parts of the world. It forms part of the Citizens’ Information Pack produced by the PANELFIT project, and is available in English, French, German, Italian and Spanish. You are welcome to translate this guide into other languages. Please send us a link to online versions in other languages, so that we can add them to the project website.
    Keywords: General Data Protection Regulation (GDPR),ICTs,citizen science,data management,legal and ethical issues,vulnerability
    JEL: C89 Z19 D89
    Date: 2021
  27. By: Leonardo Fabio Morales; Carlos Ospino; Nicole Amaral
    Abstract: This paper assesses whether the expansion of online job vacancies leads to a more efficient labor market. We provide compelling evidence that the increase in online job vacancy penetration in Colombia has had an enhancing effect on the labor market's efficiency by making it easier for firms to find workers to fill their job openings. An estimation of the Beveridge Curve (unemployment to vacancies relationship), a well-established theoretical development from search models, concludes that policies that increase online vacancy posting enhance efficiency. We implement a differences in differences design to take advantage of a regulation, which mandates that all authorized online vacancy providers report any online vacancy to the Public Employment Service in Colombia. We find that sub-segments of the labor market with a relevant fraction of their vacancies posted online, presented on average nearly 15% lower vacancy rate for a given unemployment rate. Therefore, for these sub-segments, the Beveridge curve shifted inwards due to efficiency enhancements. These findings support active search policies to reduce information barriers, which reduce the odds of firms and workers finding one other in the labor market. Policies as those implemented by the Public Employment Service in Colombia seem to be beneficial. **** RESUMEN: Este documento presenta evidencia de que el aumento de vacantes publicadas a través de internet en Colombia ha incrementado la eficiencia del mercado laboral, esto al facilitar que las empresas encuentren trabajadores para cubrir sus posiciones laborales abiertas. En este estudio estimamos curvas de Beveridge, la relación entre desempleo y vacantes; a través de este desarrollo teórico establecido desde los modelos de búsqueda, se concluye que las políticas que aumentan la publicación de vacantes en línea mejoran la eficiencia del mercado. Implementamos un diseño de diferencias en diferencias para aprovechar una regulación, que exige que todos los proveedores de vacantes en línea autorizados reporten cualquier vacante en línea al Servicio Público de Empleo en Colombia. Encontramos que los sub-segmentos del mercado laboral con una fracción significativa de sus vacantes publicadas a través de internet presentaban en promedio una tasa de vacantes casi un 15% menor, para una tasa de desempleo determinada. En el contexto de los modelos de búsqueda, lo anterior implica que en los subsegmentos afectados por la política, la curva de Beveridge se desplazó hacia adentro. Lo anterior implica una mejora en la eficiencia, dado que para una tasa de desempleo fija, las vacantes se llenaron con más facilidad. Nuestros hallazgos respaldan las políticas de búsqueda activa para reducir las barreras de información, las cuales reducen las probabilidades de que las empresas y los trabajadores se encuentren en el mercado laboral.
    Keywords: Online vacancies, Labor demand, Beveridge Curve, vacantes online, Demanda laboral, Curva de Beveridge
    JEL: J23 J63 J60
    Date: 2021–10
  28. By: Michael Kunin; Kresimir Zigic
    Abstract: We study how private intellectual property rights protection affects equilibrium prices and profits in a duopoly competition between firms that offer a product variety of distinct qualities (vertical product differentiation) in a setup that is closely related to that put forward by Jain (2008), where firms offer the same qualities in equilibrium (horizontal product differentiation). Consumers may make a choice to buy a legal version, use an illegal copy (if they want to and can), or not use a product at all. Using an illegal version violates intellectual property rights protection and is thus punishable when disclosed. Thus, both private and public (copyright) intellectual property rights protection are available on scene.
    Keywords: vertical and horizontal product differentiation; software piracy; Bertrand competition; private and public intellectual property rights protection;
    JEL: D43 L11 L21 O25 O34
    Date: 2021–08
  29. By: Ndajiwo, Mustapha
    Abstract: African economies need adequate revenues for development, but weak tax laws, illicit financial flows and aggressive tax planning have made it difficult for them to attain their full potential in raising revenue. Furthermore, the advent of digitalised business models, although with considerable potential to improve trade in Africa, has greatly exacerbated the two central challenges of international tax. The first is the definition of taxable presence, and the second is the allocation of business profits of multinational enterprises (MNEs) among the different jurisdictions where they operate. This has generated much debate and has seen the rise in unilateral measures in different jurisdictions. This paper is a case study of six African countries, namely Nigeria, Ghana, Senegal, Kenya, Rwanda, and Uganda. It examines the issue of nexus and profit allocation and the presence of digitalised businesses in Africa and recommends immediate and long-term options available to African countries.
    Date: 2020
  30. By: Klimczuk, Andrzej; Česnuityte, Vida; Avram, Gabriela
    Abstract: The term collaborative economy (CE) itself is relatively new, and according to the European Commission, the term is used interchangeably with the term sharing economy (SE). The term SE was frequently used when early models, such as Airbnb or ZipCar, appeared and gained popularity, especially in the United States, but it was afterwards substituted with the term CE in the European contexts. The country reports in this collection often use the two terms interchangeably, further illustrating the fact that a generally agreed definition is still missing. However, the ambition driving the term CE is to create specific European economic models with greater emphasis on the community's involvement. In Europe, it is still the case that the definition of the CE and SE remains fuzzy, including both non-profit and for-profit models, supported by both monetary and non-monetary exchanges among participants. The phenomenon is complex, covering various fields of activity, as well as operating at various levels, ranging from the international to the national, regional, and local. Some definitions focus mostly on sustainability, while others highlight technological and financial aspects and business models specific to the phenomenon. This chapter is organized as follows. First, a short overview of the basic theoretical approaches to CE is presented. Further, the structure of the book is discussed in detail, and the text closes with a summary.
    Keywords: Collaborative Economy; Shared Consumption; Sharing Economy; Platform Capitalism; Legal Regulations; Fair Economy
    JEL: D83 Z18
    Date: 2021
  31. By: Steven Ongena (University of Zurich - Department of Banking and Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)); Florentina Paraschiv (Zeppelin University, Chair of Finance; Norwegian University of Science and Technology, Faculty of Economics and Management, NTNU Business School; University of St. Gallen, Institute for Operations Research and Computational Finance); Endre J Reite (NTNU Department of International Business)
    Abstract: In this paper, we analyse the price discrimination and household switching in the residential mortgage market. Accessing a unique proprietary micro-data set from Norway, we examine the difference between the loan rate paid by current clients when receiving a competing offer from another bank and the best rate simultaneously being offered to new customers by the current bank. The results show that current clients pay around 20 basis points more than new customers are offered; however, this rate differential is kept in check by client switching. New regulations and digitalization that enhance transparency could reduce the rate differential, but the introduction of new banking products as well as the change in timing of the rate differentiation - from immediate upfront to gradually over time - may be used to preserve it.
    Keywords: Mortgage lending, Financial regulation, Consumer protection, digitalization, Price discrimination
    JEL: D12 D14 G21 C41
    Date: 2021–09
  32. By: Loretta J. Mester
    Abstract: It is hard to get through a week without hearing about a new cybersecurity event that has affected an organization and its customers. These events impose costs and affect operations at institutions of all sizes. Efforts to disrupt an institution’s operations; to steal, corrupt, or destroy data and intellectual property; or to divert funds have become more prevalent. According to Boston Consulting Group, financial services firms are 300 times as likely as other types of companies to be targeted by a cyber attack.1 Just as the financial system is constantly evolving, so, too, are the cybersecurity risks that institutions need to assess and manage. Given the vital role that financial services firms play in supporting a strong global economy – a role clearly demonstrated throughout the pandemic – it behooves us all to continually expand our knowledge of the risks we face and the best way to combat them.
    Keywords: cyber security
    Date: 2021–10–05
  33. By: Denti, Daria; Faggian, Alessandra
    Abstract: Do spatial socioeconomic features influence a digital behaviour like cyberhate? Our contribution provides an answer to this question, showing how high levels of income inequality determine high volumes of hate tweets in Italy. Our findings are robust to potential endogeneity problems of income inequality, as well as to the inclusion of confounding factors and to competing estimation strategies. Additionally, we find that education does not act as a protective factor against cyberhate in unequal places, aligning with existing evidence showing that inequality may trigger intolerance, including among educated people, threatening the perceived stability of social positions. Also, in the Italian case, the perception of economic insecurity fuels cyberhate, alongside the transmission of self-interest values along family generations. The latter finding relates to existing evidence supporting the role of persistent social norms in shaping people’s attitudes.
    Keywords: hate; online behaviour; inequality; self-interest; conflict; OUP deal
    JEL: D31 D74 J15 Z10
    Date: 2021–08–26
  34. By: Tendai Zawaira (Department of Economics, University of Pretoria, Hatfield 0028, South Africa); Matthew Clance (Department of Economics, University of Pretoria, Hatfield 0028, South Africa); Carolyn Chisadza (Department of Economics, University of Pretoria, Hatfield 0028, South Africa); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa)
    Abstract: This study analyses the association between financial inclusion and gender inequality in sub-Saharan Africa. Our findings suggest that generally, most individuals in sub-Saharan Africa rely on informal sources of finance, such as savings at a savings club and borrowing from family and friends compared to formal financial sources. Moreover, women are more likely to turn to the informal sources compared to men which is a concern that needs to be addressed at policy level. Improving access to finance is at the center of improving gender equality and increasing the economic freedoms and opportunities that women have to contribute to their families and societies.
    Keywords: Gender, Financial development, Financial inclusion, Africa
    JEL: J16 O11
    Date: 2021–10
  35. By: Guo, Dong; Zhou, Peng (Cardiff Business School)
    Abstract: We propose a flow-based criterion (intensity of use) and a stock-based criterion (stability of value) for choosing an anchor currency. This conceptual framework is applied to analyzing the RCEP region. According to the estimated TVP-VAR model, the influence of the US dollar in the region was weakened during the global financial crisis and the COVID pandemic, creating an opportunity for both Chinese Yuan and Japanese Yen to compete for the anchor currency. In terms of the intensity criterion, China accounts for the largest share in the regional share, but Yen seems to have an upper hand in the stability criterion. The sophisticated cooperative-competitive relationship between China and Japan may prolong the birth of a new anchor currency. Before then, US dollar still holds the role and the RCEP regional trade is subject to excessive volatility.
    Keywords: RCEP; TVP-VAR; Anchor Currency; Internationalization
    JEL: F13 F33 F45
    Date: 2021–09

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.