nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2022‒07‒18
27 papers chosen by

  1. Are digital-using UK firms more productive? By Diane Coyle; Kieran Lind; David Nguyen; Manuel Tong Koecklin
  2. Sustaining Digital Transformation: The imperative to innovate continuously in the Australian financial services sector By Munns, Benjamin Jack; Van Toorn, Christine; Finnegan, Patrick; Kalgovas, Bradley; Benlian, Alexander
  3. Are decentralized finance really decentralized? A social network analysis of the Aave protocol on the Ethereum blockchain By Ziqiao Ao; Gergely Horvath; Luyao Zhang
  4. Agtech: startups y nuevas tecnologías digitales para el sector agropecuario. Los casos de Argentina y Uruguay. By Roberto Bisang; Jeremias Lachman; Andrés López; Martín Pereyra; Ezequiel Tacsir
  5. Enablers, Barriers and Impacts of Digital Financial Services: Insights from an Evidence Gap Map and Implications for Taxation By Mader, Philip; Duvendack, Maren; Lees, Adrienne; Larquemin, Aurelie; Macdonald, Keir
  6. Cash in the Pocket, Cash in the Cloud: Cash Holdings of Bitcoin Owners By Daniela Balutel; Christopher Henry; Kim Huynh; Marcel Voia
  7. Smartphone farming in Ireland By Dillon, Emma J.; Moran, Brian
  8. How to Solve Big Problems: Bespoke Versus Platform Strategies By Atif Ansar; Bent Flyvbjerg
  9. Central Bank Digital Currencies, Internet of Things, and Islamic Finance: Blockchain Prospects and Challenges By Al-Ansari, Khalid Ahmed; Aysan, Ahmet Faruk
  10. Exploring technological instantiation of regulatory practices in entangled financial markets By Wendy Currie; Jonathan Jm Seddon
  11. International monetary policy and cryptocurrency markets: dynamic and spillover effects By Elsayed, Ahmed H.; Sousa, Ricardo M.
  12. Gender Gap in Business Angel financing By Andrea Bellucci; Gianluca Gucciardi; Rossella Locatelli; Cristiana Schena
  13. Determinants of Campaign Success: Empirical evidence from equity crowdfunding in Japan By KURIHARA Koki; HONJO Yuji
  14. Dependency structures in cryptocurrency market from high to low frequency By Antonio Briola; Tomaso Aste
  15. Creative Destruction? Impact of E-Commerce on the Retail Sector By Sudheer Chava; Alexander Oettl; Manpreet Singh; Linghang Zeng
  16. Can I Invest in Metaverse? The Effect of Obtained information and Perceived Risk on Purchase Intention by The Perspective of the Information Adoption Model By \.Ibrahim Halil Efendio\u{g}lu
  17. Study on the competition conditions in the online advertising sector in Spain By Comisión Nacional de los Mercados y la Competencia (CNMC)
  18. Electronic Money Sebagai Alat Transaksi Dalam Pandangan Islam By Mufidah, Zahra Aulia; Kurniawan, Rachmad Risqy
  19. Consumer Response to Economic Impact Payments during the COVID-19 Pandemic and the Role of Subjective Assessments of Well-Being: A View from the U.S. Using a Rapid Response Survey By Thesia Garner; Jake Schild
  20. El Uso y Acceso a Internet, Redes Sociales y Gobierno Electrónico en Bahía Blanca. Resultados Preliminares deRelevamiento Online By Lucía Andrea Díaz; Emiliano Gutiérrez
  21. Remittances and Income Inequality in Africa: Financial Development Thresholds for Economic Policy By Isaac K. Ofori; Emmanuel Gbolonyo; Marcel A. T. Dossou; Richard K. Nkrumah
  22. Cash-in-advance Payments and Transaction Size: Cash-constrained importers By YOSHIDA Yushi; Kemal TÜRKCAN; YOSHIMI Taiyo
  23. The End of the Crypto-Diversification Myth By Luciano Somoza; Antoine Didisheim
  24. The business response to Covid-19 one year on: findings from the second wave of the CEP-CBI survey on technology adoption By Juliana Oliveira-Cunha; Capucine Riom; Anna Valero
  25. The Evolution Of Centralisation on Cryptocurrency Platforms By Carlo Campajola; Raffaele Cristodaro; Francesco Maria De Collibus; Tao Yan; Nicolo' Vallarano; Claudio J. Tessone
  26. Policy brief on access to finance for inclusive and social entrepreneurship: What role can fintech and financial literacy play? By OECD; European Commission
  27. Saving on the Phone - Evidence from Ghanaian Cocoa Farmers By Possner, Annkathrin; Rosero, Gabriel; Musshoff, Oliver

  1. By: Diane Coyle; Kieran Lind; David Nguyen; Manuel Tong Koecklin
    Abstract: One possible explanation for the productivity slowdown in advanced economies coinciding with widespread digital adoption is that firms need time to change organisational structures or processes to use the new technologies effectively. Using a unique UK firm-level data set, we explore the links between a large set of digital inputs and investments and productivity. We found that large firms are more digital-intensive than small ones and that digital adopters do have higher productivity than non-adopters, but the nature of the digital variables matters. Those reflecting in-house capabilities are positively related to firm-level total factor productivity (TFP) while those indicating bought-in ones are negatively related. This finding that firms' capabilities matter for the impact of digital adoption on productivity takes advantage of the wide range of digital variables we were able to use, and points to the need for future research on the role of digital technology in driving productivity to take account of organisational capabilities.
    Keywords: digital, organisation, productivity
    JEL: D22 O33 O40
    Date: 2022–03
  2. By: Munns, Benjamin Jack; Van Toorn, Christine; Finnegan, Patrick; Kalgovas, Bradley; Benlian, Alexander
    Date: 2022
  3. By: Ziqiao Ao; Gergely Horvath; Luyao Zhang
    Abstract: Decentralized finance (DeFi) has the potential to disrupt centralized finance by validating peer-to-peer transactions through tamper-proof smart contracts and thus significantly lower the transaction cost charged by financial intermediaries. However, the actual realization of peer-to-peer transactions and the levels and effect of decentralization are largely unknown. Our research pioneers a blockchain network study that applies social network analysis to measure the level, dynamics, and impacts of decentralization in DeFi token transactions on Ethereum blockchain. First, we find a significant core-periphery structure in the AAVE token transaction network where the cores include the two largest centralized crypto exchanges. Second, we provide evidence that multiple network features consistently characterize decentralization dynamics. Finally, we document that a more decentralized network significantly predicts a higher return and lower volatilities of the DeFi tokens. We point out that our approach is seminal for inspiring future extensions related to the facets of application scenarios, research questions, and methodologies on the mechanics of blockchain decentralization.
    Date: 2022–06
  4. By: Roberto Bisang (IIEP, Universidad de Buenos Aires-CONICET); Jeremias Lachman (IIEP, Universidad de Buenos Aires-CONICET); Andrés López (IIEP, Universidad de Buenos Aires-CONICET); Martín Pereyra (Universidad ORT Uruguay. Facultad de Administración y Ciencias Sociales. Departamento de Economía / CINVE); Ezequiel Tacsir (UNU-MERIT / CINVE)
    Abstract: En la última década el sector agropecuario fue testigo de un incipiente cambio radical a partir de la creciente utilización de tecnologías de base digital. Esta tendencia global se replicó en los casos de Argentina y Uruguay. Además de hacer más eficientes (y en la etapa primaria más amigables con el medio ambiente) las tareas llevadas a cabo en diversos eslabones de la cadena –desde la producción a campo, pasando por la industrialización, hasta la comercialización-, este paradigma emergente, usualmente conocido como Agtech, derivó en nuevas oportunidades para el escalamiento/upgrading en cadenas globales de valor. Los startups de este sector suelen utilizar tecnologías disruptivas –e.g. Big Data, Inteligencia Artificial, etc.- para brindar sus servicios, los cuales son provistos a través de medios digitales –e.g. aplicaciones móviles, páginas web, etc-. En particular, en este trabajo identificamos una serie de emprendimientos de base digital en Argentina y Uruguay que, a partir de las capacidades del equipo fundador y la interacción con otros actores del ecosistema –e.g. usuarios, incubadoras y aceleradoras, fondos de inversión y organismos de ciencia y técnica-, encontraron en el sector Agtech importantes oportunidades de expansión, no solo en los mercados locales, sino también en terceros países. Estos espacios de apoyo fueron centrales para que los emprendedores puedan identificar oportunidades de negocio, obtener financiamiento, desarrollar y validar las tecnologías, así como también, en algunos casos, encontrar vías para escalar sus empresas a escala internacional. Por último, en el trabajo identificamos diversos obstáculos que estarían limitando las posibilidades de crecimiento de este sector y, en esta dirección, realizamos una serie de propuestas para el diseño e implementación de políticas públicas
    Keywords: AgTech, agrarian technology, public sector, private sector, exports, Argentine, Uruguay
    JEL: L70 O13
    Date: 2022–05
  5. By: Mader, Philip; Duvendack, Maren; Lees, Adrienne; Larquemin, Aurelie; Macdonald, Keir
    Abstract: Digital financial services (DFS) have expanded rapidly over the last decade, particularly in sub-Saharan Africa. They have been accompanied by claims that they can alleviate poverty, empower women, help businesses grow, and improve macroeconomic outcomes and government effectiveness. As they have become more widespread, some controversy has arisen as governments have identified DFS revenues and profits as potential sources of tax revenue. Evidence-based policy in relation to taxing DFS requires an understanding of the enablers and barriers (preconditions) of DFS, as well as the impacts of DFS. This report aims to present insights from an Evidence Gap Map (EGM) on the enablers and barriers, and subsequent impacts, of DFS, including any research related to taxation. An EGM serves to clearly identify the gaps in the evidence base in a visually intuitive way, allowing researchers to address these gaps. This can help to shape future research agendas. Our EGM draws on elements from the systematic review methodology. We develop a transparent set of inclusion criteria and comprehensive search strategy to identify relevant studies, and assess the confidence we can place in their causal findings. An extensive search initially identified 389 studies, 205 of which met the inclusion criteria and were assessed based on criteria of cogency, transparency and credibility. We categorised 40 studies as high confidence, 97 as medium confidence, and 68 as low confidence. We find that the evidence base is still relatively thin, but growing rapidly. The high-confidence evidence base is dominated by quantitative approaches, especially experimental study designs. The geographical focus of many studies is East Africa. The dominant DFS intervention studied is mobile money. The majority of studies focus on DFS usage for payments and transfers; fewer studies focus on savings, very few on credit, and none on insurance. The strongest evidence base on enablers and barriers relates to how user attributes and industry structure affect DFS. Little is known about how policy and politics, including taxation, and macroeconomic and social factors, affect DFS. The evidence base on impacts is strongest at the individual and household level, and partly covers the business level. The impact of DFS on the macroeconomy, and the meso level of industry and government, is very limited. We find no high-confidence evidence on the role of taxation. We need more higher quality evidence on a variety of topics. This should particularly look at enablers, constraints and impacts, including the role of taxation, beyond the individual and household level. Research going forward should cover more geographic areas and a wider range of purposes DFS can serve (use cases), including savings, and particularly credit. More methodological variety should be encouraged – experiments can be useful, but are not the best method for all research questions.
    Keywords: Governance,
    Date: 2022
  6. By: Daniela Balutel; Christopher Henry; Kim Huynh; Marcel Voia
    Abstract: We estimate the effect of Bitcoin ownership on the level of cash holdings of Canadian consumers. Bitcoin ownership positively correlates with cash holdings even after accounting for selection into ownership via a control function approach. On average, Bitcoin owners hold 83 percent (in 2018) to 95 percent (in 2017) more cash than non-owners. Focusing on the quantiles of cash holdings, we find that Bitcoin ownership has a highly nonlinear effect. For example, the difference in cash holdings between Bitcoin owners and non-owners in 2017 varies from 63 percent at the 25th quantile of cash to 176 percent at the 95th quantile of cash. Our results provide some evidence to reject the hypothesis that new digital currencies or technologies, such as Bitcoin, will lead to a decline in cash holdings.
    Keywords: Bank notes; Digital currencies and fintech; Econometric and statistical methods
    Date: 2022–06
  7. By: Dillon, Emma J.; Moran, Brian
    Abstract: This paper provides a baseline assessment of Irish farmer engagement with digital technologies in operating their farm businesses pre-COVID using nationally representative data from the 2019 Teagasc National Farm Survey. The analysis thus identifies those farmers most equipped to adapt to the changing communication and operational environment and those most vulnerable to exclusion and isolation. Survey results confirm that dairy farmers are more engaged with computer and smartphone technology in operating their farm business. Preliminary econometric investigations confirm the importance of socio-demographic factors relating to both farm and household in influencing farmer uptake of such technology. More engaged farmers tended to be younger, living in younger households and with higher agri-educational qualifications. Conversely, older farmers living alone, were less likely to use ICT in conducting their farm business. Further in-depth econometric investigation is required to explore the drivers and barriers to technology adoption.
    Keywords: Farm Management, Research and Development/Tech Change/Emerging Technologies
    Date: 2022–04
  8. By: Atif Ansar; Bent Flyvbjerg
    Abstract: How should government and business solve big problems? In bold leaps or in many smaller moves? We show that bespoke, one-off projects are prone to poorer outcomes than projects built on a repeatable platform. Repeatable projects are cheaper, faster, and scale at lower risk of failure. We compare evidence from 203 space missions at NASA and SpaceX, on cost, speed-to-market, schedule, and scalability. We find that SpaceX's platform strategy was 10X cheaper and 2X faster than NASA's bespoke strategy. Moreover, SpaceX's platform strategy was financially less risky, virtually eliminating cost overruns. Finally, we show that achieving platform repeatability is a strategically diligent process involving experimental learning sequences. Sectors of the economy where governments find it difficult to control spending or timeframes or to realize planned benefits - e.g., health, education, climate, defence - are ripe for a platform rethink.
    Date: 2022–06
  9. By: Al-Ansari, Khalid Ahmed; Aysan, Ahmet Faruk
    Abstract: This paper introduces the need for blockchain technology integration for Islamic financial institutions. The paper presents three main applications of blockchain technology. It explains how such technology can be used in the banking and financial sectors by providing examples for each application. Given its relevancy, the paper expands on Central Bank Digital Currencies (CBDCs) as one of the blockchain applications. The paper then discusses salient points on how the banking sector would be affected by what is described as the future of money. Subsequently, an analysis of the use of blockchain in financial services and, in particular, the use for Islamic financial services is provided by examining examples of past successful implementations. The paper then introduces the Internet of Things (IoT) and illustrates the possible technology implementation in financial institutions. The inherent security weakness of IoT is summarized by the potential elimination of that weakness if combined with blockchain (BIoT). The paper concludes by providing a handful of suggestions and recommendations on the urgency of considering CBDCs for future daily operations, integrating Distributed Ledger technology, and using BIoT to safeguard the financial and clients' transaction records.
    Keywords: Blockchain, CBDCs, Internet of Things, IoT
    JEL: F30 G21 G23 L17 O31
    Date: 2022–04–19
  10. By: Wendy Currie (Audencia Business School); Jonathan Jm Seddon (Audencia Business School)
    Abstract: The literature on the sociology of financial markets and institutional theory promotes concepts of field, networks, performativity, agencement and financial entropy. This study builds a conceptual model of technological instantiation of regulatory practices in financial markets. We observe how asset management firms instantiate technology as a material and social artefact to regulate the actions and behaviour of human agents. The structural-agency divide reveals the coercive role of regulators who impose stringent compliance practices on financial organizations by embedding formal rules and regulations in the software. Socio-technical conditions show how human agents interpret and apply these rules to circumvent formal regulatory policies and practices. Context-specific analysis shows technological performativity and agencement co-exist in financial fields that are becoming more entangled and fragmented. Regulators respond with more complex mandates to reduce entropy in financial markets characterized by extreme volatility and instability.
    Date: 2022–03
  11. By: Elsayed, Ahmed H.; Sousa, Ricardo M.
    Abstract: Using daily data over the period August 5, 2013–September 27, 2019, this study investigates the dynamic spillovers between international monetary policies across four major economies (i.e. Eurozone, Japan, UK and US) and three key cryptocurrencies (i.e. Bitcoin, Litecoin and Ripple). In doing so, we apply a Time-Varying Parameter Vector Auto-Regression (TVP-VAR) model, a dynamic connectedness approach and network analysis. The empirical results indicate that cryptocurrency returns and monetary policy spillovers were particularly large when shadow policy rates became negative, moderated during the Fed's ‘tapering process’, and sharpened again more recently as cryptocurrency buoyancy returned. Gross directional spillovers suggest that shadow policy rates have more ‘to give than to receive’, while those from and to cryptocurrency returns are naturally volatile. There is also strong interconnectedness between monetary policy in either the US or the Eurozone and the UK, and between Bitcoin and Litecoin. However, the spillovers across monetary policy and cryptocurrencies tend to be muted. Finally, spillovers were only slightly larger during the Fed's ‘unconventional’ policy compared to the ‘standard’ era, but their composition qualitatively changed over time.
    Keywords: cryptocurrency; interconnectedness; international transmission; Monetary policy; spillovers; time-variation
    JEL: F3 G3
    Date: 2022–05–16
  12. By: Andrea Bellucci (Universita' degli Studi dell'Insubria and Mo.Fi.R.); Gianluca Gucciardi (UniCredit and Universita' degli Studi di Milano); Rossella Locatelli (Universita' degli Studi dell'Insubria); Cristiana Schena (Universita' degli Studi dell'Insubria)
    Abstract: We study the relevance of the gender of contracting parties involved in equity early-stage financing using transaction-level data on Business Angel (BA) investments around the world between 2018 and 2020. In particular, we analyze whether the gender of BA investor has an impact on the size of the financial transaction and whether female-owned businesses are disadvantaged with respect to male-owned businesses. Then, we offer insights into possible channels and underlying mechanisms that could drive BAs' behaviors. According to our findings, female-owned businesses receive less equity financing than their male counterparts. This effect is independent from the information available to BAs on the target and persists even when unobservable individual factors are taken into consideration. This disadvantage seems to be linked to male Business Angels' taste prejudice, independently from the information available to the investor.
    Keywords: Gender-based discrimination, Female-owned enterprises, Access to finance, start-up; SME financing, Business Angel
    JEL: G21 G24 G32 J16 G41 M13
    Date: 2022–06
  13. By: KURIHARA Koki; HONJO Yuji
    Abstract: This study investigates campaign success in equity crowdfunding, using campaigns listed on a leading Japanese equity crowdfunding platform. We examine how success depends on campaign- and firm-specific characteristics, including the campaign target amount. We provide evidence that campaigns launched by venture capital-backed firms are more likely to succeed than others. We also find that patenting has a positive effect on campaign success, as well as on the campaign target amount. Moreover, campaigns that have already provided services or products have a lower probability of success, although not always, and tend to set a lower target amount. Furthermore, campaigns launched by firms eligible for the Angel Tax System, introduced in Japan as a tax incentive for investment in young and small firms, have a higher tendency to succeed in equity crowdfunding.
    Date: 2022–06
  14. By: Antonio Briola; Tomaso Aste
    Abstract: We investigate logarithmic price returns cross-correlations at different time horizons for a set of 25 liquid cryptocurrencies traded on the FTX digital currency exchange. We study how the structure of the Minimum Spanning Tree (MST) and the Triangulated Maximally Filtered Graph (TMFG) evolve across time horizons from high (15 seconds) to low (1 day) frequency time resolutions. For each horizon, we test the stability, statistical significance and economic meaningfulness of the networks. Results give a deep insight into the evolutionary process of the time dependent hierarchical organization of the system under analysis. A decrease in correlation between pairs of cryptocurrencies is observed for finer time sampling resolutions. A growing structure emerges for coarser ones, highlighting multiple changes in the hierarchical reference role played by mainstream cryptocurrencies. This effect is studied both in its inter- and intra-sector realizations.
    Date: 2022–06
  15. By: Sudheer Chava; Alexander Oettl; Manpreet Singh; Linghang Zeng
    Abstract: Using an administrative payroll dataset for 2.6 million retail workers, we find that the staggered rollout of a major e-commerce firm's fulfillment centers reduces traditional retail workers' income in geographically proximate counties by 2.4%. Wages of hourly workers, especially part-time hourly workers, decrease significantly, driven by a drop in the number of hours worked. We observe a U-shaped pattern in which both young and old workers experience a sharper decrease in wage income. Consequently, some workers experience an increase in credit card delinquency. Using data for 3.2 million stores, we find that sales (employment) at proximate stores decrease by 4% (2.1%). Exits, especially of young and small stores, increase, and entry decreases. In aggregate, the retail sector loses 938 jobs per county per quarter, and the transportation-warehousing sector (food services sector) gains 256 (143) jobs. Our results highlight how creative destruction led by e-commerce impacts local labor markets.
    JEL: J30 L81 O33
    Date: 2022–05
  16. By: \.Ibrahim Halil Efendio\u{g}lu
    Abstract: Metaverse is a virtual universe that combines the physical world and the digital world. People can socialize, play games and even shop with their avatars created in this virtual environment. Metaverse, which is growing very fast in terms of investment, is both a profitable and risky area for consumers. In order to enter the Metaverse for investment purposes, it is necessary to do a certain research and gather information. In this direction, the aim of the study is to determine the effect of the quality of the information obtained by the consumers about the metaverse world, the reliability of the information and the perceived risk, on the purchase intention from the point of view of the information adoption model. For the research, data were collected online from 495 consumers who were interested in metaverse investment. AMOS and SPSS package programs were used in the analysis. First, descriptive statistical analyzes were made for the basic structure of the variables. Then the reliability and validity of the model were tested. Finally, the structural equation model was used to test the proposed model. According to the findings, the reliability and quality of the information affect the purchase intention positively and significantly, while the perceived risk affects the purchase intention negatively and significantly.
    Date: 2022–05
  17. By: Comisión Nacional de los Mercados y la Competencia (CNMC) (Comisión Nacional de los Mercados y la Competencia (CNMC))
    Abstract: The study analyzes the competitive conditions in the online advertising sector in Spain and offers a series of recommendations to improve the functioning of this market from the perspective of competition and efficient regulation. Online advertising is key to competition as it allows advertisers to reach their consumers. It is also the main source of funding for content on the Internet and is one of the most important revenue streams for large digital platforms. A more competitive functioning of the advertising industry will help start-ups and innovators to better communicate their messages. This would increase the efficiency of the whole economy.
    Keywords: Competition, Online advertising, Digital advertising, Digitization, Data, Regulation
    JEL: L40 K21 L82 L86
    Date: 2021–07–07
  18. By: Mufidah, Zahra Aulia; Kurniawan, Rachmad Risqy
    Abstract: The revolution in information and communication technology facilitated the expansion of electronic payment systems and new forms of payment instruments with the emergence of a payment instrument known as electronic money (e-money). The use of e-money as an alternative to non-cash payment instruments in several countries shows that there is considerable potential to reduce the growth rate of cash use, especially for payments that are micro to retail. The development of the digital economy is very important, almost the economy uses information, communication and digital technology. Both in product packaging or product marketing. The purpose of writing this article is to examine e-money when viewed from Islamic law and to examine what contracts exist in transactions using e-money. E-Money, which has now become part of technological advancements among the halal community and has complied with sharia principles as a means of transaction and muamalah. The author wants to see E-Money from a sharia perspective, is it in accordance with Islamic law, what contracts are contained in depositing E-Money accounts belonging to apprenticeships and refills. This article tries to examine departing from these two problems.
    Date: 2022–05–17
  19. By: Thesia Garner; Jake Schild
    Abstract: COVID-19 has become a crisis that is impacting lives, economies, and ways of life around the world. Governments have responded with policies to support and protect their populations, businesses have closed or restricted access, and consumers have adapted as best as they could. Determining in the short-run how well these policies might be working and the socio-economic impact of the pandemic on individuals and households resulted in new data collection efforts worldwide and the greater use of rapid response surveys. This research reports one such effort in the United States (U.S.) to collect data using the Household Pulse Survey (HPS), with a focus on the use of government provided economic impact or stimulus payments by households. These payments were expected to have maximum and immediate impacts. Results reveal that household were most likely to use their economic impact payments to pay off debt as opposed to meeting their spending needs. Respondents who report lower levels of subjective well-being are more likely to use the stimulus payment to "mostly pay off debt" The probability of using the stimulus payment to "mostly pay off debt" increases as subjective assessments of well-being worsen. This research is one of the earliest to examine the role subjective assessments of well-being play in determining consumer response to receipt of economic impact payments during the COVID-19 pandemic.
    Date: 2021
  20. By: Lucía Andrea Díaz (Universidad Nacional del Sur/CONICET); Emiliano Gutiérrez (Universidad Nacional del Sur/CONICET)
    Date: 2022–06
  21. By: Isaac K. Ofori (University of Insubria, Varese, Italy); Emmanuel Gbolonyo (University of Cape Town, South Africa); Marcel A. T. Dossou (Chengdu, Sichuan, China.); Richard K. Nkrumah (University of Cape Coast, Cape Coast, Ghana)
    Abstract: The study employs macro data on 42 African countries to examine whether remittances and financial development (including its sub-components of access, depth and efficiency) contribute to the equalisation of incomes across the continent. Robust evidence from the dynamic GMM estimator shows that: (i) remittances heighten income inequality in Africa, (ii) Africa’s financial system is not potent enough for repacking remittances towards the equalisation of incomes, and (iii) vis-Ã -vis financial access and depth, inefficiencies characterising Africa’s financial institution is the main reason remittances contribute to the widening of the income disparity gap. Nonetheless, the optimism which we provide by way of threshold analysis shows that channelling efforts into the development of Africa’s financial sector could yield shared income distribution dividends. In particular, efforts should be made to achieve a minimum of 23.05 per cent of financial access, and 3.02 per cent for that of efficiency of financial institutions if Africa’s financial sector is to repackage external finance towards the equalisation of incomes. A few policy recommendations are provided in the end.
    Keywords: Africa, Financial Development, Financial Sector Efficiency; Income Inequality, Remittances
    JEL: F22 F24 G21 I3 N37 O11 O55
    Date: 2022–01
  22. By: YOSHIDA Yushi; Kemal TÜRKCAN; YOSHIMI Taiyo
    Abstract: A high-productivity exporter can gain a stronger position over an importer in determining how and when payment is made. With the lower risk associated with exporters, cash-in-advance (CIA) payment is their preferred method of payment. However, a baseline probit regression for the Turkish export dataset at the transaction level did not find a positive relationship between exporters' productivity and CIA. This puzzling finding is reconciled when we consider the financial conditions of importers, which may not allow for advance payment, especially for a large cash transaction. We find that increasing transaction size discourages the use of CIA payments. We also find that the productivity of exporters is associated non-linearly, i.e., in an inverted-U shape, with the use of CIA payments.
    Date: 2022–05
  23. By: Luciano Somoza (University of Lausanne, HEC; Swiss Finance Institute); Antoine Didisheim (Swiss Finance Institute, UNIL)
    Abstract: We propose a mechanism explaining the recent high positive correlation between cryptocurrencies and the stock market. With a unique dataset of investor-level holdings from a bank offering trading accounts and cryptocurrency wallets, we show that retail investors’ net trading volumes of stocks and cryptocurrencies are positively correlated. Theoretically, this micro-level pattern translates into a cross-asset class correlation as long as the two markets are not fully integrated. We provide suggestive evidence showing that this micro-level pattern emerged in March 2020 and that stocks preferred by crypto-traders exhibit a stronger correlation with Bitcoin, especially when the cross asset retail volume is high.
    Keywords: cryptocurrencies, Bitcoin, retail investors, correlation
    JEL: G11 G12 G29
    Date: 2022–06
  24. By: Juliana Oliveira-Cunha; Capucine Riom; Anna Valero
    Abstract: We present new data from a survey of 425 UK businesses conducted in July 2021 in partnership with the Confederation of British Industry (CBI), which seeks to understand the ways in which firms have innovated one year on in response to the pandemic. We find that process innovation has been widespread since March 2020: 75% of firms have adopted digital technologies, 55% new digital capabilities and nearly 70% new management practices, and a large share of firms continued to innovate beyond the initial lockdowns. We find similar patterns in terms of the introduction of new products or services. We describe how the self-reported impacts of these technologies on firm performance and on workers differ across types of businesses, technologies adopted and business functions that these technologies relate to. We find that previous technology adoption is a strong predictor of a continued innovation response to the crisis, and that gaps in performance between more and less digitised firms might be expected to widen in the future.
    Keywords: Covid-19, Technological change, Productivity
    Date: 2021–11–10
  25. By: Carlo Campajola; Raffaele Cristodaro; Francesco Maria De Collibus; Tao Yan; Nicolo' Vallarano; Claudio J. Tessone
    Abstract: More than ten years ago the blockchain was acclaimed as the solution to overcome centralised trusted third parties for online payments. Through the years the crypto-movement changed and evolved, although decentralisation remained the core ideology and the necessary feature every new crypto-project should provide. In this paper we study the concept of centralisation in cryptocurrencies using a wide array of methodologies from the complex systems literature, on a comparative collection of blockchains, in order to define the many different levels a blockchain system may display (de-)centralisation and to question whether the present state of cryptocurrencies is, in a technological and economical sense, actually decentralised.
    Date: 2022–06
  26. By: OECD; European Commission
    Abstract: This policy brief on access to finance for inclusive and social entrepreneurship was produced by the OECD and the European Commission. It presents evidence on the access to finance challenges faced by entrepreneurs from under-represented and disadvantaged groups and social entrepreneurs, and discusses how public policy could harness the potential of fintech to address these challenges. This covers crowdfunding, blockchain and the application of big data to finance for inclusive and social entrepreneurship. The policy brief also discusses the growing need for governments to strengthen financial literacy among the target groups of inclusive and social entrepreneurship policy, including with respect to fintech. Different policy approaches are discussed, including embedding financial literacy training in financial intermediation.
    Date: 2022–07–04
  27. By: Possner, Annkathrin; Rosero, Gabriel; Musshoff, Oliver
    Abstract: The poor and rural population in Sub Saharan Africa suffers from low financial inclusion. Yet, excluding population parts from accessing formal financial services means lost opportunity for household level, as well as for the whole economy. Evidence suggests that formal saving helps to accumulate larger amounts: Recent studies show how saving contributes to smoothing consumption and increasing resilience. A powerful tool for enhancing marginalized groups’ financial inclusion are mobile financial services. In Ghana’s rapidly developing banking and savings sector open questions remain. We investigate factors affecting Ghanaian cocoa farmers decision to save, as well as their savings amount. Among other factors, we focus on different savings instruments such as mobile saving on the phone, bank accounts or the traditional group saving method Susu. We employ data from a structured telephone survey conducted in 2021 among 405 randomly sampled cocoa farmers. The results of a two-step Heckman approach show that, while Susu or a bank account enhance savings, saving on the phone is associated with lower amounts. However, female farmers seem to benefit from this technology. In the light of recent policies issued by the Ghanaian government, directed at fortifying the digital finance sector, our results provide valuable information for public policy makers as well as the private sector.
    Keywords: Agricultural Finance, Consumer/Household Economics
    Date: 2022–04

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.