nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2022‒05‒16
23 papers chosen by
Bernardo Bátiz-Lazo
Northumbria University

  1. Central Bank Digital Currency (CBDC): Critical Issues and the Indian Perspective By D. Priyadarshini; Sabyasachi Kar
  2. President's Message: Importance of Studying Innovations in Payment Technologies By James B. Bullard
  3. A Central Bank Digital Currency for India? By Barry Eichengreen; Poonam Gupta; Tim Marple
  4. The COVID-19 Pandemic and Indonesia’s Fintech Markets By Sugandi, Eric Alexander
  5. Identifying Financially Remote First Nations Reserves By Heng Chen; Walter Engert; Kim Huynh; Daneal O’Habib
  6. New Financial Technologies, Sustainable Development, and the International Monetary System By Prasad, Eswar
  7. Digital Technology and Economic Impacts of COVID-19: Experiences of the People’s Republic of China By Huang, Yiping; Qiu, Han; Wang, Jingyi
  8. Financial development, poverty, and human development in the Fintech age: a regional analysis of the Southeast Asian states By Dina Chhorn
  9. Merger Analysis in the App Economy: An Empirical Model of Ad-Sponsored Media By Kohei Kawaguchi; Toshifumi Kuroda; Susumu Sato
  10. Students' Financial Literacy: Digital Financial Literacy Perspective By Nurhazrina Mat Rahim
  11. The Ethics of Alternative Currencies By Louis Larue; Camille Meyer; Marek Hudon; Joakim Sandberg
  12. Can a Website Bring Unemployment Down? Experimental Evidence from France By Aïcha Ben Dhia; Bruno Crépon; Esther Mbih; Louise Paul-Delvaux; Bertille Picard; Vincent Pons
  13. What Explains Remittance Fees? Panel Evidence By Mr. Kangni R Kpodar; Thorsten Beck; Mathilde Janfils
  14. The Stealth Erosion of Dollar Dominance: Active Diversifiers and the Rise of Nontraditional Reserve Currencies By Mr. Serkan Arslanalp; Chima Simpson-Bell; Mr. Barry J. Eichengreen
  15. Sharing Credit Data While Respecting Privacy—A Digital Platform for Fairer Financing of MSMEs By Duan, Jin-Chuan
  16. Cryptocurrency Return Prediction Using Investor Sentiment Extracted by BERT-Based Classifiers from News Articles, Reddit Posts and Tweets By Duygu Ider
  17. European enterprise survey on the use of technologies based on artificial intelligence By Snezha SK Kazakova; Allison AD Dunne; Daan DB Bijwaard; Julien Gosse; Charles Hoffreumon; Nicolas van Zeebroeck
  18. When and Why Do Buyers Rate in Online Markets? By Xiang Hui; Tobias J. Klein; Konrad O. Stahl
  19. Crypto, Corruption, and Capital Controls: Cross-Country Correlations By Nikolay Gueorguiev; Mr. Dmitriy L Rozhkov; Mr. Jiro Honda; Keyra Primus; Ms. Marwa Alnasaa; Eslem Imamoglu; Mr. Paolo Mauro
  20. Less Cash, Less Theft? Evidence from Fintech Development in the People’s Republic of China By Jiang, Hongze; Liang, Pinghan
  21. Assessment and analysis of accounting and finance apps in start-ups in Germany: an explorative study By Salvy Goel, Salvy; Berrones-Flemmig, Claudia Nelly
  22. The Importance of Technology in Banking during a Crisis By Nicola Pierri; Yannick Timmer
  23. The Role of Venture Capital and Governments in Clean Energy: Lessons from the First Cleantech Bubble By Matthias van den Heuvel; David Popp

  1. By: D. Priyadarshini; Sabyasachi Kar (Institute of Economic Growth, Delhi)
    Abstract: A large number of Central Banks around the world are planning to introduce Central Bank Digital Currencies (CBDCs) as a legal tender in their countries. The Reserve Bank of India (RBI) has also revealed similar plans with an Indian CBDC expected in the near future. Any evaluation of such a major change in the nature of money requires a broader understanding of the opportunities and challenges arising from the adoption of CBDCs. In this paper, we discuss these issues at the conceptual level and specifically in the Indian context. We show that the conceptual issues can be characterised in three ways – monetary sovereignty issues, issues from the point of view of national sovereignty, and developmental issues. In the Indian context, we analyse these issues from the perspective of the rapid digitalization taking place in the country.
    Keywords: CBDC, Monetary Sovereignty, Disintermediation, Dollarization, Financial Inclusion, Cryptocurrencies
    JEL: E42 E51 E58 G21 G28 O33
    Date: 2021–09
  2. By: James B. Bullard
    Abstract: For several years, economists at the St. Louis Fed have been studying innovations in payment technologies such as cryptocurrencies and blockchain.
    Keywords: payment technologies; innovation; cryptocurrencies; blockchain
    Date: 2022–04–20
  3. By: Barry Eichengreen (University of California, Berkeley); Poonam Gupta (National Council of Applied Economic Research); Tim Marple (University of California, Berkeley)
    Abstract: We review arguments for CBDC issuance in India. These include facilitating payments,enhancing financial inclusion, enabling the central bank and government to retain control of the payments system, facilitating cross-border payments, reducing dependence on the dollardominatedglobal payments system, providing an encompassing platform for digital financial innovation. We then compare progress in India with other countries. In setting an end 2022 target date for issuance, India is in line with the other BRICS, but not with other countries with comparable levels of per capita GDP, which have been more reluctant to commit to a date. Nor is it in line with other countries with comparably independent central banks, which have been more cautious about setting a deadline. Finally, we sketch a roadmap and timeline for India’s CBDC project going forward.
    Keywords: Central Bank, Digital Currency, India, Monetary Systems, Payment Systems
    JEL: E40 E42 E51 E50 E58 G21
    Date: 2022–05–03
  4. By: Sugandi, Eric Alexander (Asian Development Bank Institute)
    Abstract: We investigate the impacts of the COVID-19 pandemic and the large-scale social distancing (PSBB) policy on Indonesia’s financial technology (fintech) markets. We also elaborate on the roles fintech companies can play in the national economic recovery. We find that Indonesia’s fintech markets were relatively resilient during the COVID-19 pandemic. The pandemic did not have significant impacts on Indonesia’s fintech markets, but the PSBB harmed phone banking, mobile banking, and internet banking transaction values as well as peer-to-peer (P2P) fintech lending. Nevertheless, the PSBB increased electronic money transactions. The relatively short PSBB period prevented the restrictions on economic activities from imposing too much damage on the fintech markets. The Indonesian authorities involved the fintech industry as a component of the national economic recovery program (PEN), particularly the pre-employment card (Kartu Prakerja) program. There are still many areas in which the government can utilize the fintech industry for economic recovery, including direct cash transfers to poor households and extensions of subsidized loans for micro, small, and medium-sized enterprises (MSMEs).
    Keywords: fintech; Indonesia; MSMEs
    JEL: G23 G29 O33 O39
    Date: 2021–08
  5. By: Heng Chen; Walter Engert; Kim Huynh; Daneal O’Habib
    Abstract: Chen et al. (2021) show that almost one-third of First Nations band offices in Canada are within 1 kilometre (km) of an automated banking machine (ABM) or financial institution (FI) branch and more than half are within 5 km. Further, over three-quarters of band offices are within 20 km of an ABM or FI branch and almost 90% are within 50 km. We focus on 49 First Nations locations that are more than 100 km away from an ABM or FI branch or do not have an identifiable travel route (by road or boat) to an ABM or FI branch. We refer to these First Nations as financially remote. We show that these locations have small populations and limited access to internet and mobile services. As a result, these First Nations have poor access to cash sources and physical delivery of financial services as well as limited access to digital payments and electronic banking. We also assess the remoteness of these locations according to an alternative method based on measures of agglomeration (community population) and proximity to other communities. We find that, according to this measure, these 49 financially remote First Nations are generally among the most geographically remote communities in Canada. Further, we show that these First Nations are also among the lowest scoring communities in Canada according to a measure of community well-being based on indicators of educational attainment, labour force activity, income and housing. The geographical remoteness of these 49 First Nations, their small populations, limited infrastructure and digital services, and relatively low community well-being all likely contribute to their poor access to cash and financial services.
    Keywords: Bank notes; Digital currencies and fintech; Financial institutions; Financial services; Payment clearing and settlement systems
    JEL: E4 E41 E42 E5 G2 G21
    Date: 2022–05
  6. By: Prasad, Eswar (Asian Development Bank Institute)
    Abstract: New financial technologies—including those underpinning cryptocurrencies—herald broader access to the financial system, quicker and more easily verifiable settlement of transactions and payments, and lower transaction costs. Domestic and cross-border payment systems are on the threshold of transformation, with significant gains in speed and lowering of transaction costs on the horizon. For emerging market and developing economies, the digitization of finance carries a number of potential benefits, including broadening of financial inclusion, quicker and cheaper cross-border remittances, and increased convenience of domestic payments. But some of these developments could also increase these countries’ exposure to volatile capital flows. Governments, central banks, and regulatory agencies will face difficult challenges in striking the right balance between fostering innovations and mitigating risks arising from them.
    Keywords: fintech; payment systems; international payments; financial inclusion; capital flows; financial regulation
    JEL: E50 G00
    Date: 2021–07
  7. By: Huang, Yiping (Asian Development Bank Institute); Qiu, Han (Asian Development Bank Institute); Wang, Jingyi (Asian Development Bank Institute)
    Abstract: Digital technology has rapidly transformed the economy of the People's Republic of China (PRC) over the past decade, especially in areas of e-commerce and digital finance. In many ways, digital technology changes the pattern of economic operation, as it enlarges business scale, increases economic efficiency, improves user experiences, reduces operating costs, and controls financial risks. Digital technology served as an important economic stabilizer during COVID-19, by accurately tracking down confirmed infected cases, moving a lot of economic activities online ,and issuing consumption coupons by local governments. These not only enabled the PRC to be the first to come out of the pandemic and to achieve impressive V-shaped recovery, but also with 5G and other technological and infrastructural development. The digital economy in the PRC will likely grow more rapidly in the coming years, bringing about more fundamental changes. However, the authorities will also need to address a wide range of policy issues to ensure the smooth development of the digital economy, including the easing of the data inequality problem, protection of individual rights, and regulation of platform behavior.
    Keywords: digital technology; digital economy; COVID-19; PRC
    JEL: E60 G23 O31
    Date: 2021–07
  8. By: Dina Chhorn (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper examines the effect of financial development in the Fintech age, measured by broad money, domestic credit, and mobile money, on poverty and human development in the Southeast Asian economies. Using unbalanced longitudinal dataset (1990-2017), the findings suggest that broad money and domestic credit contribute to poverty reduction and promote human development. The role of mobile money is seen to have a statistically positive impact only if we analyse it with human development. Additionally, when we take a closer look at the different stage of economic, political and institutional development in this region, we found that the positive effect of broad money and domestic credit is mostly found only in the less developed and less democratic countries. The mobile money, on the other hand, is found to statistically promote the human development in both groups of countries, but there is no statistical relationship for poverty analysis. To avoid the endogeneity bias driven by the fact that the variables in the analysis are not exogenous, the paper uses the instrumental variables and two-stage least squares for panel-data estimations, taking from the economic literature on the role of financial development in developing countries. In doing so, along with additional statistical tests of subsample analysis of political and institutional factors and higher- and lower-income countries, the results confirm the robustness in the analysis.
    Keywords: Financial development,Fintech,poverty,human development
    Date: 2021
  9. By: Kohei Kawaguchi (Department of Economics, The Hong Kong University of Science and Technology); Toshifumi Kuroda (Department of Economics, Tokyo Keizai University); Susumu Sato (Institute of Economic Research, Hitotsubashi University)
    Abstract: This paper proposes a new model of imperfect competition of ad-sponsored media, which can sell “free†products, for a merger analysis applicable to the mobile app industry. To analyze developers' monetizing with both price and advertising in an app, we consider a consumer who faces both budget and time constraints. Moreover, to catch up with newly created and quickly redefined markets, we automate the conversion from in-text product descriptions to numerical product attributes by combining word embedding and dimension reduction techniques. The model defines an equilibrium over consumers' downloads, usage, and in-app purchase decisions and app developers' price and non-price competition. We estimate the model using mobile app data from Japan from 2015 to 2017. The estimate revealed that the marginal disutility of watching advertisements is 12.4% of the ad price for games and 3.1% for other apps. The relevant markets defined by a Small, Non-transitory but Significant Increase in Cost (SSNIC) test are larger than the product categories. Merger simulations show that the app market is, at the static level, competitive and even a merger among the top 10 apps has negligible effects on surplus. The proportional transaction fee imposed by the platform, whose welfare implication is ambiguous because it increases the advertisements and decreases the download prices, is more influential. For game apps, the total surplus is maximized at 12%-15% rather than the actual 30%, increasing welfare by 2.4% and app developers' profits by 44%. For other apps, the total surplus curve is almost flat around 30%.
    Keywords: Merger simulation, market definition, SSNIP, antitrust policy, ad-sponsored media, platform transaction fee, app economy, distributed word representation
    JEL: L11 L13 L41 L86 M13 M21
    Date: 2021–06
  10. By: Nurhazrina Mat Rahim (Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, 42300 Bandar Puncak Alam, Selangor, Malaysia Author-2-Name: Norli Ali Author-2-Workplace-Name: Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, 42300 Bandar Puncak Alam, Selangor, Malaysia Author-3-Name: Mohd Fairuz Adnan Author-3-Workplace-Name: Faculty of Accountancy, Universiti Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, 42300 Bandar Puncak Alam, Selangor, Malaysia Author-4-Name: Author-4-Workplace-Name: 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 - This study aims to assess students' financial literacy levels using digital financial literacy (DFL), the most recent element. Methodology – Students who are based in Selangor, Malaysia, were chosen for this study as they recorded a high rate of youth bankruptcy. Convenience sampling was used to distribute the questionnaires among the students between March and August of 2021, where a total of 184 responses were retrieved. Findings and Novelty – The results indicated that students possessed advanced financial knowledge and confidence. Despite the extensive experience in completing online financial transactions, the students lack digital financial knowledge and an understanding of the risks associated with digital financial services. Therefore, including DFL in financial education is essential to ensuring future generations' financial well-being. This study also adds to the limited literature on financial digital literacy and serves as an eye-opener to policymakers on its importance in financial education. Type of Paper - Empirical"
    Keywords: Financial literacy, financial confidence, Digital financial literacy, Digital financial knowledge, Students
    JEL: I22 M29 O16
  11. By: Louis Larue; Camille Meyer; Marek Hudon; Joakim Sandberg
    Abstract: Alternative currencies are means of payment that circulate alongside-as an alternative or complement to-official currencies. While these currencies have existed for a long time, both society and academia have shown a renewed interest in their potential to decentralize the governance of monetary affairs and to bring people and organizations together in more ethical or sustainable ways. This article is a review of the ethical and philosophical implications of these alternative monetary projects. We first discuss various classifications of these currencies before analyzing the ethical challenges linked to the way they tackle social and environmental issues. We also examine the incentive-based and coercive mechanisms used by these currencies from an ethical perspective and debate the promises and perils of monetary decentralization and democracy. We conclude by identifying an agenda for future research.
    Keywords: alternative currencies; complementary currencies; cryptocurrencies; ethics of money; nature of money
    Date: 2022
  12. By: Aïcha Ben Dhia; Bruno Crépon; Esther Mbih; Louise Paul-Delvaux; Bertille Picard; Vincent Pons
    Abstract: We evaluate the impact of an online platform giving job seekers tips to improve their search and recommendations of new occupations and locations to target, based on their personal data and labor market data. Our experiment used an encouragement design and was conducted in collaboration with the French public employment agency. It includes 212,277 individuals. We find modest effects on search methods: the users of the platform adopt some of its tips and they are more likely to use resources provided by public employment services. However, following individual trajectories for 18 months after the intervention, we do not observe any impact on time spent looking for a job, search scope (occupational or geographical), or self-reported well-being. Most importantly, we do not find any effect on any employment outcome, whether in the short or medium run. We conclude that the enthusiasm around the potential for job-search assistance platforms to help reduce unemployment should be toned down.
    JEL: D83 D84 J22 J24 J62 J64
    Date: 2022–04
  13. By: Mr. Kangni R Kpodar; Thorsten Beck; Mathilde Janfils
    Abstract: This paper uses data across 365 corridors to document time and country variation in remittance fees and explore factors predicting variation in remittance fees. We document a general reduction in such fees over the past decade although the goal of fees below 3 percent has not been met yet in many corridors. We identify both cost- and risk-based constraints and market structure as barriers to lower remittance fees. Higher transaction costs as result of a more rural population in the sending country and lower scale are associated with higher remittance fees. However, lower risks due to the stability of fixed exchange rates and Internet rather than cash payment are associated with lower remittance fees. Finally, remittance corridors dominated by banks and few players are characterized by higher fees.
    Keywords: Remittances; migration; access to financial services
    Date: 2022–04–01
  14. By: Mr. Serkan Arslanalp; Chima Simpson-Bell; Mr. Barry J. Eichengreen
    Abstract: We document a decline in the dollar share of international reserves since the turn of the century. This decline reflects active portfolio diversification by central bank reserve managers; it is not a byproduct of changes in exchange rates and interest rates, of reserve accumulation by a small handful of central banks with large and distinctive balance sheets, or of changes in coverage of surveys of reserve composition. Strikingly, the decline in the dollar’s share has not been accompanied by an increase in the shares of the pound sterling, yen and euro, other long-standing reserve currencies and units that, along with the dollar, have historically comprised the IMF’s Special Drawing Rights. Rather, the shift out of dollars has been in two directions: a quarter into the Chinese renminbi, and three quarters into the currencies of smaller countries that have played a more limited role as reserve currencies. A characterization of the evolution of the international reserve system in the last 20 years is thus as ongoing movement away from the dollar, a recent if still modest rise in the role of the renminbi, and changes in market liquidity, relative returns and reserve management enhancing the attractions of nontraditional reserve currencies. These observations provide hints of how the international system may evolve going forward.
    Keywords: International reserves, currency composition, dollar; USD share; dollar dominance; currency share; dollar share; share of foreign exchange; Reserve currencies; Currencies; International reserves; Reserves management; Asset valuation; Global; Africa
    Date: 2022–03–24
  15. By: Duan, Jin-Chuan (Asian Development Bank Institute)
    Abstract: Lending institutions’ reluctance to lend to MSMEs or to offer them competitive interest rates stems from the relatively costly information acquisition for small loans. The central idea is to bridge the information gap between the demand and the supply side by creating a credit analytics sharing infrastructure through federated learning, which completely respects data privacy. Pooling credit information across multiple lending institutions, particularly rare default events, enables the construction of a more informative credit model for MSMEs, which can then serve as a common good among lenders. The technology also allows for lender-specific models, which in essence share the model’s parameters on the common prediction variables while differing in their respective alternative data fields. The lenders in the MSME space can work like a coopetition and continue to compete with their varying risk appetites, loan rates, and banking services. We use real MSME credit data to demonstrate the feasibility of the sharing technology and to study the impact of the COVID-19 pandemic via a portfolio that we assembled from four hypothetical banks operating in six ASEAN countries.
    Keywords: COVID-19; coopetition; alternative data; federated learning; default
    JEL: C10 C80 G21
    Date: 2021–08
  16. By: Duygu Ider
    Abstract: This paper studies the extent at which investor sentiment contributes to cryptocurrency return prediction. Investor sentiment is extracted from news articles, Reddit posts and Tweets using BERT-based classifiers fine-tuned on this specific text data. As this data is unlabeled, a weak supervision approach by pseudo-labeling using a zero-shot classifier is used. Contribution of sentiment is then examined using a variety of machine learning models. Each model is trained on data with and without sentiment separately. The conclusion is that sentiment leads to higher prediction accuracy and additional investment profit when the models are analyzed collectively, although this does not hold true for every single model.
    Date: 2022–04
  17. By: Snezha SK Kazakova; Allison AD Dunne; Daan DB Bijwaard; Julien Gosse; Charles Hoffreumon; Nicolas van Zeebroeck
    Date: 2020–07–28
  18. By: Xiang Hui; Tobias J. Klein; Konrad O. Stahl
    Abstract: Online ratings play an important role in many markets. We study the often disputed information content of these ratings, by proposing a reduced-form Bayesian model of the typical buyer’s rating decision. Our empirical evidence based on eBay raw data is in line with even intricate predictions from it. We thus have good reasons to calibrate the model to moments of the data. Our simulations suggest that the rating record reveals the seller’s type after about 100 transactions, or 65-70 ratings.
    Keywords: online markets, rating, reputation
    JEL: D83 L12 L13 L81
    Date: 2022
  19. By: Nikolay Gueorguiev; Mr. Dmitriy L Rozhkov; Mr. Jiro Honda; Keyra Primus; Ms. Marwa Alnasaa; Eslem Imamoglu; Mr. Paolo Mauro
    Abstract: Empirical investigation of the factors underlying the growing usage of crypto-assets is in its infancy, owing to data limitations. In this paper, we present a simple cross-country analysis drawing on recently released survey-based data. We explore the correlation of crypto-asset usage with indicators of corruption, capital controls, a history of high inflation, and other factors. We find that crypto-asset usage is significantly and positively associated with higher perception of corruption and more intensive capital controls. Notwithstanding the data limitations, the results support the case for regulating crypto-assets, including know-your-customer approaches, as opposed to taking a laissez-faire stance.
    Keywords: cypto-assets, cryptocurrency, corruption, capital controls; crypto-asset usage; Pairwise correlation; data limitation; capital control; crypto-asset adoption; capital openness; Capital controls; Virtual currencies; Corruption; Global
    Date: 2022–03–25
  20. By: Jiang, Hongze (Asian Development Bank Institute); Liang, Pinghan (Asian Development Bank Institute)
    Abstract: We investigate the impact of fintech development on an important type of crime: theft. Based on Becker’s rational criminal theory, we suggest that fintech development could mitigate theft activities by increasing the earnings from legitimate work, relaxing potential criminals’ financial constraints, and reducing the expected gains from theft. We established a unique dataset containing information on more than 1 million theft defendants during the period 2014–2018, which we extracted from 874,000 judgment statements. Then, we aggregated them to construct a city-year panel of theft activities and matched it with the city-level economic activities and Fintech development level. The results show that a 1 standard deviation increase in the fintech development level has a significant association with a 0.39 standard deviation decrease in thefts’ density. Robustness checks and instrumental variable estimation support the main results. Further, the development of fintech reduces the density of thefts by reducing residents’ cash holding and providing more job opportunities. Finally, we utilized a nationally representative household survey to estimate the cost of theft for households, finding that victims suffer from more mental health problems, increasing their health expenditure. Our results suggest an unexpected source of welfare gain from the development of fintech: an improvement in public security.
    Keywords: fintech; theft; crime; People’s Republic of China
    JEL: C81 G59 K14 K42
    Date: 2021–08
  21. By: Salvy Goel, Salvy; Berrones-Flemmig, Claudia Nelly
    Abstract: Small and medium-sized enterprises face several challenges mainly related with lack of access to Finance frequently due to a lack of formal Accounting system and financial management, which leads to weaknesses in their internal financial capabilities. Moreover, from the supply side traditional financial institutions have failed to fulfil the needs of SMEs and presently FinTechs have developed innovative ways to increase the financial literacy in SMEs and to facilitate financing for SMEs (Imanbaeva et al., 2017). This study aims to assess and analyze one of these innovative financial instruments in an explorative way: some relevant Accounting and Finance applications present in the market, based on criteria decided by exploring the scientific literature and evaluating it by interviewing Accounting professionals working in start-ups in Germany. The results show that Zoho Books and Xero turned out to be better than the others in the services provided by them and they received the best ratings and feedback. Their best features are their user friendliness, the integrations offered by them, the diversity of the financial reports that they offer and amount of automation they offer to perform the everyday tasks. The most important factor when choosing an Accounting system is assessing the needs and requirements of the business and then to select the software that best suits the needs. Therefore, this research can be also helpful for small and medium business owners who do not have much idea about the financial aspects and need help with choosing the right accounting software for their business, based on the experience and perspectives of the interviewing Accounting professionals. It can act as a guide for them to understand which factors they should take into account while making their decision and the feedback from the participants can help them while choosing among the five software analysed during this research.
    Keywords: SME Finance,Fintech,Accounting and Finance apps,innovative financial instruments,start-ups,Germany
    JEL: M O
    Date: 2022
  22. By: Nicola Pierri; Yannick Timmer
    Abstract: What are the implications of information technology (IT) in banking for financial stability? Data on US banks' IT equipment and the background of their executives reveals that higher pre-crisis IT adoption led to fewer non-performing loans and more lending during the global financial crisis. Empirical evidence indicates a direct role of IT adoption in strengthening bank resilience; this includes instrumental variable estimates exploiting the historical location of technical schools. Loan-level analysis shows that high-IT banks originated mortgages with better performance, indicating better borrower screening. No evidence points to offloading of low-quality loans, differences in business models, or enhanced monitoring.
    Keywords: Technology; Financial Stability; IT Adoption; Non-Performing Loans; Screening
    JEL: D82 D83 E44 G14 G21 O30
    Date: 2022–04–13
  23. By: Matthias van den Heuvel; David Popp
    Abstract: After a boom and bust cycle in the early 2010s, venture capital (VC) investments are, once again, flowing towards green businesses. In this paper, we use Crunchbase data on 150,000 US startups founded between 2000 and 2020 to better understand why VC initially did not prove successful in funding new clean energy technologies. Both lackluster demand and a lower potential for outsized returns make clean energy firms less attractive to VC than startups in ICT or biotech. However, we find no clear evidence that characteristics such as high-capital intensity or long development timeframe are behind the lack of success of VC in clean energy. In addition, our results show that while public sector investments can help attract VC investment, the ultimate success rate of firms receiving public funding remains small. Thus, stimulating demand will have a greater impact on clean energy innovation than investing in startups that will then struggle through the “valley of death”. Only with demand-side policies in place should governments try to plug funding gaps by targeting clean energy startups with low potential for outsized returns that will continue to find it hard to attract private capital.
    Keywords: venture capital, renewable energy, start-up firms
    JEL: G24 Q40 Q48 Q55
    Date: 2022

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