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on Payment Systems and Financial Technology |
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Issue of 2022‒03‒21
twenty papers chosen by |
| By: | Fatkhurrohman (University of Warwick) |
| Abstract: | This paper investigates the effect of the arrival of 4G networks on poverty rates by exploiting the gradual adoption of 4G networks in 514 districts/cities in Indonesia. Robust differences-in-differences estimates indicate that 4G network adoption has a significant negative influence on poverty rates – which we argue is due to the increased access to Fintech afforded by the 4G network, hus increasing poor people's access to credit. Moreover, Fintech capitalizes on mobile app-based services, a vastly growing business that has gained popularity since 2015. In addition, this paper also finds that Fintech promotes internet-based job opportunities for impoverished individuals, increasing their income and alleviating poverty in Indonesia. |
| Keywords: | Fintech ; Financial Inclusion ; Poverty ; Welfare ; Indonesia JEL Classification: O33 ; O36 ; O53 ; I31 ; I32 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:wrkesp:24&r= |
| By: | Luis Aguiar; Christian Peukert; Maximilian Sch\"afer; Hannes Ullrich |
| Abstract: | Data is often at the core of digital products and services, especially when related to online advertising. This has made data protection and privacy a major policy concern. When surfing the web, consumers leave digital traces that can be used to build user profiles and infer preferences. We quantify the extent to which Facebook can track web behavior outside of their own platform. The network of engagement buttons, placed on third-party websites, lets Facebook follow users as they browse the web. Tracking users outside its core platform enables Facebook to build shadow profiles. For a representative sample of US internet users, 52 percent of websites visited, accounting for 40 percent of browsing time, employ Facebook's tracking technology. Small differences between Facebook users and non-users are largely explained by differing user activity. The extent of shadow profiling Facebook may engage in is similar on privacy-sensitive domains and across user demographics, documenting the possibility for indiscriminate tracking. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.04131&r= |
| By: | Joshua S. Gans; Richard T. Holden |
| Abstract: | Blockchain front-running involves multiple agents, other than the legitimate agent, claiming a payment from performing a contract. It arises because of the public nature of blockchain transactions and potential network congestion. This paper notes that disputes over payments are similar to classic ownership disputes (such as King Solomon's dilemma). We propose a simultaneous report mechanism that resolves Solomon's dilemma (using only ordinal preference information) and also eliminates blockchain front-running. In each case, the mechanism relies on threats to remove ownership from all claimants and preferences from the legitimate claimant over allocations to other agents. |
| JEL: | D82 D86 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29780&r= |
| By: | Md. Mahmudul Alam (UUM - Universiti Utara Malaysia); Ala Eldin Awawdeh (Emirates College of Technology); Azim Izzuddin Bin Muhamad (UiTM - Universiti Teknologi MARA [Shah Alam]) |
| Abstract: | Purpose This study aims to explore the challenges and prospects of using e-wallets in Malaysia, and what it means for businesses and customers. Suggested here are strategies to leverage the strengths and opportunities as well as overcome the weaknesses and threats. Suggested here are strategies to leverage the strengths and opportunities as well as overcome the weaknesses and threats. Design/methodology/approach This study analyses the e-wallet phenomenon using a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis to assess Malaysian business development. It is supported with findings from the literature and secondary data. The relevant secondary data were collected from Bank Negara Malaysia and the World Bank. Findings This study shows that e-wallets in Malaysia have still not achieved their purpose but there is huge potential to do so. The SWOT analysis identified several strengths (e.g. financial incorporation, easy to access, protection and safety, simple for other accounts to connect to, product and consumer service management, quick to implement/administer), weaknesses (e.g. lack of infrastructure and the "tapping" of devices already cornered by the mobile phone market, opportunities (e.g. eliminating fraud, better customer service, promotion/loyalty that can be built into customer experience) and threats (e.g. attacks from viruses, frequent inquiries whether multiple wallets can be used by clients, the concerns of reckless spending behaviour of the e-wallet users). Research limitations/implications This study is crucial for assessing the current situation and the prospects of e-wallets in Malaysia. This study also offers significant insights for policymakers and e-wallet service providers to develop appropriate strategies to enhance e-wallet services in Malaysia. Originality/value This paper is the first of its kind to integrate a SWOT analysis and the rapid development of the e-wallet market in Malaysia. Hence, the findings could broaden our knowledge on the fintech industry and enable firms to participate in the e-wallet market. |
| Keywords: | Fintech,E-Wallet,Digital payment,Electronic payment,Malaysia |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03538151&r= |
| By: | Go, Geoffrey (Monash University) |
| Abstract: | The recent ‘News Media Bargaining Code’ has raised controversy as Australia attempts to force digital platforms to pay news publishers for their links and snippets. To understand the impacts of the bargaining code on both the sustainability and quality of journalism, we develop a model where there are two types of news content available to consumers : full news from the news publisher and snippets on the platform. We show that the bargaining code strictly improves the news publisher’s welfare but increases their joint investment incentives if and only if the relative investment in snippets is suffciently large. We further establish that commercial agreements are a promising alternative that strictly increases both the welfare of news publishers and the quality of their news. Our results suggest that the bargaining code is better used as an indirect threat to promote fair commercial negotiations, rather than used directly. |
| Keywords: | advertising ; online platforms ; content sharing ; journalism JEL Classification: L52 ; L82 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:wrkesp:23&r= |
| By: | Alam, Md. Mahmudul (Universiti Utara Malaysia); Awawdeh, Ala Eldin; Bin Muhamad, Azim Izzuddin |
| Abstract: | Purpose: This study aims to explore the challenges and prospects of using e-wallets in Malaysia, and what it means for businesses and customers. Suggested here are strategies to leverage the strengths and opportunities as well as overcome the weaknesses and threats. Suggested here are strategies to leverage the strengths and opportunities as well as overcome the weaknesses and threats. Design/methodology/approach: This study analyses the e-wallet phenomenon using a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis to assess Malaysian business development. It is supported with findings from the literature and secondary data. The relevant secondary data were collected from Bank Negara Malaysia and the World Bank. Findings: This study shows that e-wallets in Malaysia have still not achieved their purpose but there is huge potential to do so. The SWOT analysis identified several strengths (e.g. financial incorporation, easy to access, protection and safety, simple for other accounts to connect to, product and consumer service management, quick to implement/administer), weaknesses (e.g. lack of infrastructure and the ‘tapping’ of devices already cornered by the mobile phone market, opportunities (e.g. eliminating fraud, better customer service, promotion/loyalty that can be built into customer experience) and threats (e.g. attacks from viruses, frequent inquiries whether multiple wallets can be used by clients, the concerns of reckless spending behaviour of the E-wallet users). Research implications: This study is crucial for assessing the current situation and the prospects of e-wallets in Malaysia. This study also offers significant insights for policymakers and e-wallet service providers to develop appropriate strategies to enhance e-wallet services in Malaysia. Originality/value: This paper is the first of its kind to integrate a SWOT analysis and the rapid development of the e-wallet market in Malaysia. Hence, the findings could broaden our knowledge on the fintech industry and enable firms to participate in the e-wallet market. |
| Date: | 2021–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:y7zds&r= |
| By: | James B. Bullard |
| Abstract: | St. Louis Fed President James Bullard discussed inflation, digital currency and a proposed increase in the federal minimum wage. He spoke during an appearance on CNBC’s “Squawk Box.” |
| Keywords: | inflation; digital currency; minimum wage |
| Date: | 2021–02–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlps:93731&r= |
| By: | Md. Mahmudul Alam (UUM - Universiti Utara Malaysia); Russayani Ismail (UUM - Universiti Utara Malaysia); Jamaliah Said (UiTM - Universiti Teknologi MARA [Shah Alam]); Reza Pahlevi (Universitas Amikom Yogyakarta) |
| Abstract: | There are many market segmentations in the credit card industry in Malaysia. One of the special categories of credit card is dedicated to the women group only and promoted as a tool for increasing women empowerment, women entrepreneurship development and women financial access ability. Therefore, this study compares the features of credit cards dedicated to women and credit cards in general in Malaysia through descriptive statistics and one-way ANOVA test. This study utilizes data of currently available total 234 unique credit cards including four credit cards dedicated to the women group. The data analyses 13 features of credit cards. Among them only two features of credit cards dedicated to women are statistically significantly different from credit cards in general, which are annual charge for balance transfer and cash back facility. Therefore, it is recommended to make more distinguish features in the credit cards that are dedicated to them to encourage more women entrepreneurship as well as to ensure their real financial empowerment. The outcomes of this research will provide useful interpretations to women consumers, business managers, NGOs, government agencies and other policymakers who are working on women's development issues. |
| Keywords: | Credit Card,Market segmentation,Women empowerment,Entrepreneurship development,Financial access,Malaysia |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03538174&r= |
| By: | Mourelatos, Evangelos; Mourelatos, Haris |
| Abstract: | This study examines how instant online video sharing affects artists' musical streams during the pandemic. On average, the use of the TikTok app significantly increases artists' streams, by approximately 5%. This increase is even higher for male, European and dj Mag 2020 new entry artists. |
| Keywords: | Covid-19,Streams,Online video sharing |
| JEL: | I1 L82 Z10 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1050&r= |
| By: | Marc Ivaldi (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Jiekai Zhang (Hanken School of Economics) |
| Abstract: | The empirical analysis of media platforms economics has often neglected the multi-homing behaviour of advertisers. Assuming away the cross-substitutability and/or complementarity between the advertising slots of different platforms could damage the quality and the robustness of counterfactual analysis. To evaluate the consequence of such an abstraction, we compare the simulation results of hypothetical platform mergers when the demand on the advertising side is derived from a Translog cost model which allows for multi-homing, and when it is approximated by using a simple log-linear inverse demand model that ignores the differentiation among media platforms' advertising slots. Ignoring the existence of substitutes or complements on the advertising side would result in overpredicting the losses of the viewers' surplus and in underpredicting the gains in platforms' revenues |
| Keywords: | Two-sided market,Platform merger,Advertising,TV market,Competition policy |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03472984&r= |
| By: | James B. Bullard |
| Abstract: | St. Louis Fed President James Bullard discussed his expectations for inflation 2021 and 2022. He also discussed the labor market, wages, cryptocurrencies and other topics during an appearance on Yahoo Finance. |
| Keywords: | inflation; labor market; wages; cryptocurrency |
| Date: | 2021–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlps:93736&r= |
| By: | Nobuyuki Hanaki; Takayuki Hoshino; Kohei Kubota; Fabrice Murtin; Masao Ogaki; Fumio Ohtake; Naoko Okuyama |
| Abstract: | This paper compares the results of an experiment conducted both in the laboratory and online with participants recruited from the same subject pool using the Trustlab platform. This platform has been used to obtain incentivized and internationally comparable behavioral economics measures of altruism, cooperation, reciprocity, trust, and trustworthiness, employing representative samples in many countries. We find no significant difference between the results from sessions conducted in the laboratory and online. While the existing literature shows that the choice between laboratory and online experiments can cause differences in results in some cases, our findings support the hypothesis that they do not cause differences in the behavioral economics measures when using the Trustlab platform. |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:1168&r= |
| By: | Zhengkun Li |
| Abstract: | Value at risk and expected shortfall are increasingly popular tail risk measures in the financial risk management field. Both academia and financial institutions are working to improve tail risk forecasts in order to meet the requirements of the Basel Capital Accord; it states that one purpose of risk management and measuring risk accuracy is, since extreme movements cannot always be avoided, financial institutions can prepare for these extreme returns by capital allocation, and putting aside the appropriate amount of capital so as to avoid default in times of extreme price or index movements. Forecast combination has drawn much attention, as a combined forecast can outperform the individual forecasts under certain conditions. We propose two methodology, one is a semiparametric combination framework that can jointly produce combined value at risk and expected shortfall forecasts, another one is a parametric regression framework named as Quantile-ES regression that can produce combined expected shortfall forecasts. The favourability of the semiparametric combination framework has been presented via an empirical study - application in cryptocurrency markets with high-frequency data where the necessity of risk management application increases as the cryptocurrency market becomes more popular and mature. Additionally, the general framework of the parametric Quantile-ES regression has been presented via a simulation study, whereas it still need to be improved in the future. The contributions of this work include but are not limited to the enabling of the combination of expected shortfall forecasts and the application of risk management procedures in the cryptocurrency market with high-frequency data. |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2202.10918&r= |
| By: | Nicholas Buchholz (Princeton University); Laura Doval (Columbia University); Jakub Kastl (Princeton University); Filip Matejka (CERGE-EI); Tobias Salz (Massachusetts Institute of Technology) |
| Abstract: | We recover valuations of time using detailed data from a large ride-hail platform, where drivers bid on trips and consumers choose between a set of rides with different prices and waiting times. We estimate demand as a function of prices and waiting times and find that price elasticities are substantially higher than waiting-time elasticities. We show how these estimates can be mapped into values of time that vary by place, person, and time of day. We find that the value of time during non-work hours is 16% lower than during work hours. Most of the heterogeneity in the value of time, however, is explained by individual differences. We apply our estimates to study optimal time incentives in highway procurement. Standard industry practices, which set incentives based on a uniform value of time, lead to mis-priced time costs by up to ninety percent. |
| Keywords: | Value of time, demand in transportation markets, ride hail |
| JEL: | C73 D83 L90 R12 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2020-19&r= |
| By: | Georges Casamatta (LISA - Lieux, Identités, eSpaces, Activités - UPP - Université Pascal Paoli - CNRS - Centre National de la Recherche Scientifique, TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - Université Fédérale Toulouse Midi-Pyrénées - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Sauveur Giannoni (LISA - Lieux, Identités, eSpaces, Activités - UPP - Université Pascal Paoli - CNRS - Centre National de la Recherche Scientifique); Daniel Brunstein (LISA - Lieux, Identités, eSpaces, Activités - UPP - Université Pascal Paoli - CNRS - Centre National de la Recherche Scientifique); Johan Jouve (LISA - Lieux, Identités, eSpaces, Activités - UPP - Université Pascal Paoli - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The literature on short-term rental emphasises the heterogeneity of the hosts population. Some argue that professional and opportunistic hosts differ in terms of their pricing strategy. This study highlights how differences in market perception and information create a price differential between professional and non-professional players. Proposing an original and accurate definition of professional hosts, we rely on a large dataset of almost 9,000 properties and 73,000 observations to investigate the pricing behaviour of Airbnb sellers in Corsica (France). Using OLS and the double-machine learning methods, we demonstrate that a price differential exists between professional and opportunistic sellers. In addition, we assess the impact of seasonality in demand on the size and direction of this price differential. We find that professionals perceive a higher degree of market power than others during the peak season and it allows them to enhance their revenues. |
| Keywords: | Short-term rental,Pricing,Professionalism,Double machine learning,Seasonality,Market-power |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03250484&r= |
| By: | Biavaschi, Costanza; Giulietti, Corrado; Zenou, Yves |
| Abstract: | This paper investigates the causal pathways through which ethnic social networks influence individual naturalization. Using the complete-count Census of 1930, we digitize information on the exact residence of newly arrived immigrants in New York City. This allows us to define networks with a granularity detail that was not used before for historical data - the Census block - and therefore to overcome issues of spatial sorting. By matching individual observations with the complete-count Census of 1940, we estimate the impact that the exogenous fraction of naturalized co-ethnics in the network observed in 1930 has on the probability of immigrants to acquire citizenship a decade later. Our results indicate that the concentration of naturalized co-ethnics in the network positively affects individual naturalization and that this relationship operates through one main channel: information dissemination. Indeed, immigrants who live among naturalized co-ethnics are more likely to naturalize because they have greater access to critical information about the benefits and procedures of naturalization. |
| Keywords: | Social networks,assimilation,naturalization,migration |
| JEL: | J61 J62 N32 Z1 |
| Date: | 2022 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:glodps:1049&r= |
| By: | Sumit Agarwal (National University of Singapore); John R. Grigsby (Princeton University); Ali Hortaçsu (University of Chicago); Gregor Matvos (Northwestern University); Amit Seru (Stanford University) |
| Abstract: | We study the interaction of search and application approval in credit markets. We combine a unique dataset, which details search behavior for a large sample of mortgage borrowers, with loan application and rejection decisions. Our data reveal substantial dispersion in mortgage rates and search intensity, conditional on observables. However, in contrast to predictions of standard search models, we find a novel non-monotonic relationship between search and realized prices: borrowers, who search a lot, obtain more expensive mortgages than borrowers' with less frequent search. The evidence suggests that this occurs because lenders screen borrowers' creditworthiness, rejecting unworthy borrowers, which differentiates consumer credit markets from other search markets. Based on these insights, we build a model that combines search and screening in presence of asymmetric information. Risky borrowers internalize the probability that their application is rejected, and behave as if they had higher search costs. The model rationalizes the relationship between search, interest rates, defaults, and application rejections, and highlights the tight link between credit standards and pricing. We estimate the parameters of the model and study several counterfactuals. The model suggests that "overpayment" may be a poor proxy for consumer unsophistication since it partly represents rational search in presence of rejections. Moreover, the development of improved screening technologies from AI and big data (i.e., fintech lending) could endogenously lead to more severe adverse selection in credit markets. Finally, place based policies, such as the Community Reinvestment Act, may affect equilibrium prices through endogenous search responses rather than increased credit risk. |
| Keywords: | credit markets, household finance |
| JEL: | G21 G50 G51 G53 L00 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:pri:econom:2020-1&r= |
| By: | Robert W. Fairlie; Frank Fossen |
| Abstract: | Was the $278 billion reboot of the $800 billion Paycheck Protection Program (PPP) in early 2021 disbursed equitably to minority communities? This paper provides the first analysis of how PPP funds were disbursed to minority communities in the third and final round of the program, which was specifically targeted to underserved and disadvantaged communities. Using administrative microdata on the universe of PPP loans, we find a strong positive relationship between PPP flows, as measured by the number of loans per employer business or loan amounts per employee, and the minority share of the population or businesses in the third round. In contrast, the relationship was negative in the first round of 2020 and less positive in the second round of 2020. We find a stronger positive relationship between minority share and loan numbers or amounts to employer businesses for first draw loans than second draw loans in 2021 (capturing some persistence in inequities). The patterns are similar for loan numbers and amounts to nonemployer businesses but with a strong positive relationship with minority share for both first draw and second draw loans. The rebooted PPP that ran from January to May 2021 appears to have been disbursed to minority communities as intended. |
| JEL: | J15 L26 |
| Date: | 2022–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29732&r= |
| By: | Ivo Maes (Robert Triffin Chair, University of Louvain and Ichec Brussels Management School); Ilaria Pasotti (Consultant at the Intesa Sanpaolo Group Historical Archives) |
| Abstract: | Especially with the Asian financial crisis of 1997-1998, Asian countries have advocated a profound reform of the international financial architecture. Their proposals focused on two main axes: a reform of the global financial system and stronger regional monetary integration in Asia. There are here significant parallels with the ideas of Robert Triffin (1911-1993). Triffin became famous with trenchant analyses of the vulnerabilities of the international monetary system, especially his book Gold and the Dollar Crisis. Triffin put forward several proposals for reforming the global monetary system, but he also developed proposals for regional monetary integration. These were very much based on his experience with the European Payments Union, and focused on the creation of a (European) Reserve Fund and a (European) currency unit. In this paper we focus on Triffin’s proposals for an Asian payments union in the late 1960s, giving special attention to Japan (in Triffin’s time the biggest Asian economy). |
| Keywords: | : Triffin, Bretton Woods, international liquidity, regional monetary integration, Asian Payments Union, Japan |
| JEL: | A11 B22 B31 E30 E50 F02 F32 |
| Date: | 2022–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbb:reswpp:202203-405&r= |
| By: | Alex Adegboye (Covenant University, Ogun State, Ota, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon); Vanessa S. Tchamyou (Yaoundé, Cameroon); Tolulope T. Osinubi (Obafemi Awolowo University, Ile-Ife, Nigeria); Ibukunoluwa Adeyanju (Covenant University, Ogun State, Ota, Nigeria) |
| Abstract: | This inquiry relates to the empirical linkages between educational quality, Facebook penetration and accountability dynamics. The empirical investigation is based on the Ordinary Least Squares (OLS) technique and Quantile regression for the conditional linkages which articulate low, middle, and high initial levels of public accountability. It explores a cross-section of 168 countries. The main finding is that there is an overwhelming positive connection between Facebook penetration and accountability dynamics. The established positive nexus is apparent in all quantiles of public accountability. In addition, tertiary and secondary school enrollment positively influence public accountability. By utilizing a novel dataset in analyzing the established nexuses, this study adds to the existing literature on social media and governance (i.e., educational quality, Facebook penetration and accountability dynamics). Similarly, the posture addresses contemporary policy concerns regarding a lack of documentation on the impacts of social media. |
| Keywords: | education, school enrollment, social media, accountability |
| Date: | 2021–01 |
| URL: | http://d.repec.org/n?u=RePEc:abh:wpaper:21/086&r= |