nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2023‒05‒01
35 papers chosen by

  1. Women in Fintech: As Leaders and Users By Purva Khera; Ratna Sahay; Sumiko Ogawa; Mahima Vasishth; Ratna Sahay
  2. Measuring Fair Competition on Digital Platforms By Lukas J\"urgensmeier; Bernd Skiera
  3. Platform Design Biases in Ad-Funded Two-Sided Markets By Jay Pil Choi; Doh-Shin Jeon
  4. Modelling Determinants of Cryptocurrency Prices: A Bayesian Network Approach By Rasoul Amirzadeh; Asef Nazari; Dhananjay Thiruvady; Mong Shan Ee
  5. Review and comparison of US, EU, and UK regulations on cyber risk/security of the current Blockchain Technologies - viewpoint from 2023 By Petar, Radanliev
  6. Banks’ Physical Footprint and Financial Technology Adoption By Lucas A. Mariani; Jose Renato Haas Ornelas; Bernardo Ricca
  7. The Dark Side of Algorithms? The Effect of Recommender Systems on Online Investor Behaviors By Ruiqi Rich Zhu; Cheng He; Yu Jeffrey Hu
  8. The Digital Banking and Fintech Sandbox - Nepal By Tan, Albert
  9. Assessment of Features and Market Segmentation of the Credit Card Industry in Malaysia By Alam, Md. Mahmudul; Ismail, Russayani; Said, Jamaliah; Dirie, Khadar Ahmed
  10. La blockchain à Barcelone on sait « commun » faire ! By Maxime Malafosse; Amandine Pascal
  11. Social Media Charity Campaigns and Pro-social Behaviour. Evidence from the Ice Bucket Challenge By Fazio, Andrea; Reggiani, Tommaso G.; Scervini, Francesco
  12. Crypto carry By Maik Schmeling; Andreas Schrimpf; Karamfil Todorov
  13. Can e-commerce platforms build the resilience of brick-and-mortar businesses to the COVID-19 shock? An empirical analysis in the Chinese retail industry By Sirui Li; Ying Liu; Jing Su; Xin Luo; Xiao Yang
  14. Do Education Sector Credit Cards Differ with Other Credit Cards in Malaysia? By Alam, Md. Mahmudul; Ibrahim, Yusnidah Bt; Sriyana, Jaka
  15. Fighting Free with Free: Freemium vs. Piracy By Antoine Dubus; Christine Halmenschlager; Patrick Waelbroeck
  16. The Unintended Consequences of Censoring Digital Technology - Evidence from Italy's ChatGPT Ban By David H. Kreitmeir; Paul A. Raschky
  17. Nowcasting economic activity using transaction payments data By Laura Felber; Simon Beyeler
  18. Intraday liquidity around the world By Biliana Alexandrova Kabadjova; Anton Badev; Saulo Benchimol Bastos; Evangelos Benos; Freddy Cepeda- Lopéz; James Chapman; Martin Diehl; Ioana Duca-Radu; Rodney Garratt; Ronald Heijmans; Anneke Kosse; Antoine Martin; Thomas Nellen; Thomas Nilsson; Jan Paulick; Andrei Pustelnikov; Antoine Francisco Rivadeneyra; Mario Rubem do Coutto Bastos; Sara Testi
  19. NFT Bubbles By Andrea Barbon; Angelo Ranaldo
  20. A Deep Dive into NFT Whales: A Longitudinal Study of the NFT Trading Ecosystem By Na Hyeon Park; Hanna Kim; Chanhee Lee; Changhoon Yoon; Seunghyeon Lee; Youngjin jin; Seungwon Shin
  21. Financial innovation, technological improvement and bank’ profitability By Mustansar, Talreja
  22. CBDC policies in open economies By Andrej Sokol; Michael Kumhof; Marco Pinchetti; Phurichai Rungcharoenkitkul
  23. Do Grocery Feedback Systems Enabling Access to Past Consumption Impact Individual Food Purchase Behavior? By Koski, Heli; Kuikkaniemi, Kai; Pantzar, Mika
  24. CBDC Policies in Open Economies By Michael Kumhof; Marco Pinchetti; Phurichai Rungcharoenkitkul; Andrej Sokol
  25. The Choice of Titling System in Land and the Blockchain By Bertrand Crettez; Marie Obidzinski
  26. The Online Vaccination Debate : The Case of France By Arthur Juet
  27. Platform pricing choice : Exclusive deals or uniform prices By Shekhar, Shiva
  28. How Voluntary Information Sharing Systems Form: Evidence from a U.S. Commercial Credit Bureau By José Liberti; Jason Sturgess; Andrew Sutherland
  29. The Economic Impacts of Electronic Transaction Development in Thailand. By Pinitjitsamut, Montchai
  30. The U.S. Dollar as an International Currency and Its Economic Effects: Working Paper 2023-04 By Daniel Fried
  31. Helping Small Businesses become more Data-Driven: A Field Experiment on eBay By Sagit Bar-Gill; Erik Brynjolfsson; Nir Hak
  32. Ride-hailing and transit accessibility considering the trade-off between time and money By Pereira, Rafael H. M.; Herszenhut, Daniel; Saraiva, Marcus; Farber, Steven
  33. Online communities and entrepreneuring mothers: practices of building, being and belonging By Natalia Vershinina; Nichola Phillips; Maura Mcadam
  34. From Gutenberg to Chat GPT : The Challenge of the Digital University By Henri-Paul Rousseau
  35. Banking Crises in Historical Perspective By Carola Frydman; Chenzi Xu

  1. By: Purva Khera (International Monetary Fund); Ratna Sahay (International Monetary Fund); Sumiko Ogawa (International Monetary Fund); Mahima Vasishth (University of California); Ratna Sahay (International Monetary Fund)
    Abstract: While digital financial services have made access to finance easier, faster, and less costly, helping to broaden digital financial inclusion, its impact on gender gaps varies across countries. Moreover, women leaders in the fintech industry, although growing, remain scarce. This paper explores the interaction between ‘women’ and ‘fintech’ by examining: (i) the role of women leaders on firm-level performance in the fintech industry; and (ii) the determinants of gender gaps in the usage of digital services to better understand the crosscountry differences. Results indicate that greater gender diversity in the executive board is associated with better performance of fintech firms. With regard to determinants of the gender gaps in the usage of digital financial services, we find that higher financial and digital literacy of women is associated with lower gender gaps in digital financial inclusion, and that socio-cultural factors also play a key role.
    Keywords: Firm performance, Women leaders, Digital financial inclusion, Financial literacy, Digital literacy
    JEL: J16 L25 G53
    Date: 2023–03–02
  2. By: Lukas J\"urgensmeier; Bernd Skiera
    Abstract: Digital platforms use recommendations to facilitate the exchange between platform actors, such as trade between buyers and sellers. Platform actors expect, and legislators increasingly require that competition, including recommendations, are fair - especially for a market-dominating platform on which self-preferencing could occur. However, testing for fairness on platforms is challenging because offers from competing platform actors usually differ in their attributes, and many distinct fairness definitions exist. This article considers these challenges, develops a five-step approach to measure fair competition through recommendations on digital platforms, and illustrates this approach by conducting two empirical studies. These studies examine Amazon's search engine recommendations on the Amazon marketplace for more than a million daily observations from three countries. They find no consistent evidence for unfair competition through search engine recommendations. The article also discusses applying the five-step approach in other settings to ensure compliance with new regulations governing fair competition on digital platforms, such as the Digital Markets Act in the European Union or the proposed American Innovation and Choice Online Act in the United States.
    Date: 2023–03
  3. By: Jay Pil Choi (Michigan State University [East Lansing] - Michigan State University System); Doh-Shin Jeon (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - 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)
    Abstract: We investigate how platform market power affects platforms' design choices in ad-funded two-sided markets, where platforms may find it optimal to charge zero price on the consumer side and to extract surplus on the advertising side. We consider design choices affecting both sides in opposite ways and compare private incentives with social incentives. Platforms' design biases depend crucially on whether they can charge any price on the consumer side. We apply the framework to technology adoption, privacy, and ad load choices. Our results provide a rationale for a tougher competition policy to curb market power of ad-funded platforms with free services.
    Date: 2022–02–25
  4. By: Rasoul Amirzadeh; Asef Nazari; Dhananjay Thiruvady; Mong Shan Ee
    Abstract: The growth of market capitalisation and the number of altcoins (cryptocurrencies other than Bitcoin) provide investment opportunities and complicate the prediction of their price movements. A significant challenge in this volatile and relatively immature market is the problem of predicting cryptocurrency prices which needs to identify the factors influencing these prices. The focus of this study is to investigate the factors influencing altcoin prices, and these factors have been investigated from a causal analysis perspective using Bayesian networks. In particular, studying the nature of interactions between five leading altcoins, traditional financial assets including gold, oil, and S\&P 500, and social media is the research question. To provide an answer to the question, we create causal networks which are built from the historic price data of five traditional financial assets, social media data, and price data of altcoins. The ensuing networks are used for causal reasoning and diagnosis, and the results indicate that social media (in particular Twitter data in this study) is the most significant influencing factor of the prices of altcoins. Furthermore, it is not possible to generalise the coins' reactions against the changes in the factors. Consequently, the coins need to be studied separately for a particular price movement investigation.
    Date: 2023–03
  5. By: Petar, Radanliev
    Abstract: The results of this study show that cybersecurity standards are not designed in close cooperation between the two major western blocks - US and EU. In addition, while the US is still leading in this area, the security standards for cryptocurrencies, internet-of-things, and blockchain technologies have not evolved as fast as the technologies have. The key finding from this study is that although the crypto market has grown into a multi-trillion industry, the crypto market has also lost over 70% since its peak, causing significant financial loss for individuals and cooperation’s. Despite this significant impact to individuals and society, cybersecurity standards and financial governance regulations are still in their infancy.
    Keywords: Cyber Risk Assessment; Cloud Cybersecurity Standards; Financial Governance, DeFi, NIST; ISO27001; IoT; Blockchain Technologies, Metaverse, Cryptocurrencies.
    JEL: A3 F3 F38 F5 F55 F6 G2 G21 G23 G28
    Date: 2023
  6. By: Lucas A. Mariani; Jose Renato Haas Ornelas; Bernardo Ricca
    Abstract: We investigate how the presence of physical bank branches moderates financial technology diffusion. Our identification strategy uses services suspensions caused by criminal groups that perform hit-and-run raids and explode branch facilities, rendering them inoperable for a couple of months. We show that the shock depletes the cash inventory of branches, but the stock of credit and deposits remain unaffected. We then provide evidence that customers increase their usage of noncash payments after the event. More specifically, we focus on a new instant payment technology called Pix and show that, after robbery events, Pix usage and the number of users increase in the affected municipalities. We find that these effects are mediated by the number of alternative branches to access cash. Interestingly, we find Pix usage spillover effects beyond cash substitution. First, the number of Pix transactions and users increases when either the payer or the payee is in a municipality that was not affected by the robbery. Second, we show that the population affected by such robberies start to perform Pix transactions and use other financial services at digital financial institutions, indicating that cash dependence can be an impediment to their expansion. Our results shed light on the determinants of technology adoption and the consequences of the transition in the banking industry from a physical branch-based model to an increasing reliance on digital services.
    Date: 2023–03
  7. By: Ruiqi Rich Zhu; Cheng He; Yu Jeffrey Hu
    Abstract: Despite the widespread adoption of recommender systems by online investment platforms, empirical research into their impact on online investors' behaviors is scarce. Using data from a global e-commerce platform, the authors of this study adopt a regression discontinuity design to causally examine the effects of recommender systems on online investor behaviors, specifically in a mutual fund investment context. The results show that funds featured by recommender systems prompt significantly more purchases. This effect is especially salient among unsophisticated investors, who appear more likely to follow system-provided recommendations. Further analysis also reveals that these investors tend to suffer significantly worse investment performance after purchasing the recommended funds. Thus, recommender systems threaten to amplify wealth inequality among investors in financial markets.
    Date: 2023–03
  8. By: Tan, Albert
    Abstract: Over the past few years, the concept of a Digital Banking and Fintech Sandbox has emerged as a powerful force for driving innovation and fostering financial inclusion, especially in emerging economies that grapple with various challenges in providing access to essential financial services. A regulatory sandbox serves as a structured, secure, and controlled environment that enables startups, financial institutions, and other relevant stakeholders to experiment with and test innovative financial products and services while enjoying temporary relief from specific regulations. This forward-thinking, progressive initiative strives to promote collaboration, deepen regulatory comprehension, and accelerate the adoption of innovative technologies, all the while maintaining a strong commitment to consumer protection and financial stability. Nepal, a nation characterized by a sizable unbanked population, is well-positioned to reap substantial benefits by embracing this innovative concept. According to the World Bank's Global Findex Database, a mere 45% of Nepalese adults held an account at a financial institution in 2017. This statistic reveals a concerning reality: a significant segment of the population remains without access to essential financial services such as savings accounts, credit, and insurance. By implementing a Digital Banking and Fintech Sandbox, Nepal has the opportunity to leverage state-of-the-art technological advancements and inventive business models to bridge this financial inclusion gap and ultimately elevate the economic prospects of its citizens. The legal community in particular occupies a critical position in advancing the Digital Banking and Fintech Sandbox in Nepal, as they boast the requisite expertise and authority to shape the regulatory landscape that will govern the sandbox. Legal professionals, including lawyers, judges, and policymakers, must collaborate to develop a tailored regulatory framework for the sandbox that strikes a delicate balance between fostering innovation and safeguarding consumer protection, data privacy, and cybersecurity. By facilitating constructive dialogue among stakeholders and fostering a spirit of cooperation, the legal fraternity can help cultivate an enabling environment for the growth and adoption of digital banking and fintech solutions that cater to the needs of the unbanked population.
    Date: 2022–06–14
  9. By: Alam, Md. Mahmudul (Universiti Utara Malaysia); Ismail, Russayani; Said, Jamaliah; Dirie, Khadar Ahmed
    Abstract: To operate successfully in this credit card industry, various kinds of credit cards are offered to distinct user groups. This empirical study is conducted in Malaysia, and it examines the features of different types of credit card available. By using descriptive and one-way ANOVA test, this study analyses data of 234 credit cards which were collected from and websites. The cards are categorised based on the usage purpose like airline tickets, insurance, dining, entertainment, fuel, lifestyle, groceries, shopping, utilities healthcare and general use. In total thirteen features are analysed for all of these cards. The findings show there is no significant difference in the purpose of cards based on the features of interest and profit rate, balance transfer annual charge, annual fees, annual fees for supplementary card, late payment, late payment maximum fees, cash withdrawal charges fees, minimum annual income, minimum age for primary cards, maximum age for primary cards, and minimum age for supplementary cards. However, only two features are statistically significant among the cards, these being cash back and interest rate on cash withdrawal. The findings will provide important insights for business managers, credit card users, and other policymakers regarding features and market segmentation in the credit card industry in Malaysia.
    Date: 2022–03–05
  10. By: Maxime Malafosse (LEST - Laboratoire d'Economie et de Sociologie du Travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique, CERGAM - Centre d'Études et de Recherche en Gestion d'Aix-Marseille - AMU - Aix Marseille Université - UTLN - Université de Toulon); Amandine Pascal (LEST - Laboratoire d'Economie et de Sociologie du Travail - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The 15M citizens' movement in Barcelona has brought a political shift in the city. Now, the municipality intends to include the citizens in the democratic process and to engage an economic policy based on the commons. This case study presents the city's digital strategy that seeks to give back digital sovereignty to Barcelona's citizens. More specifically, it presents the European DECODE project launched to deploy data commons. This project has developed and experimented blockchain technologies with local citizens to let them control the sharing of their personal data. This case, therefore, aims at better understand how decentralized digital tools, based on blockchain technology, can foster the management of the data commons at the city scale. To answer this question, three pilot projects tested in Barcelona are selected : Digital Democracy and Data Commons, Citizens Internet of Things Data Governance and BarcelonaNow.
    Abstract: Le mouvement citoyen des indignés du 15M de Barcelone a entrainé un basculement politique dans la ville. Dorénavant, la volonté de la municipalité est d'inclure les citoyens dans le processus démocratique et d'engager une politique économique centrée sur les communs. Dans ce contexte, cette étude de cas présente la stratégie digitale de la ville qui vise à redonner de la souveraineté numérique aux Barcelonais. Plus spécifiquement, elle présente le projet européen DECODE lancé pour déployer des communs de la donnée. Ce projet a permis de développer et d'expérimenter des technologies blockchains avec les citoyens afin qu'ils contrôlent le partage de leurs données personnelles. Ce cas vise donc à mieux comprendre comment des outils numériques décentralisés, qui reposent sur la technologie blockchain, peuvent favoriser la gestion des communs de la donnée à l'échelle d'une ville. Pour y répondre, trois projets pilotes expérimentés à Barcelone sont retenus : Digital Democracy and Data Commons, Citizens Internet of Things Data Governance et BarcelonaNow.
    Keywords: European project DECODE, Commons, Data, Technology blockchain, ostrom, Barcelona, Smart city, Bien commun, Stratégie urbaine digitale, Technologie Blockchain, Politique urbaine, Projet européen DECODE, Mouvement citoyen, Données numériques, Barcelone
    Date: 2022–10–12
  11. By: Fazio, Andrea (Sapienza University of Rome); Reggiani, Tommaso G. (Cardiff University); Scervini, Francesco (University of Pavia)
    Abstract: Social media use plays an important role in shaping individuals' social attitudes and economic behaviours. One of the first well-known examples of social media campaigns is the Ice Bucket Challenge (IBC), a charity campaign that went viral on social media networks in August 2014, aiming to collect money for research on amyotrophic lateral sclerosis (ALS). We rely on UK longitudinal data to investigate the causal impact of the Ice Bucket Challenge on pro-social behaviours. In detail, this study shows that having been exposed to the IBC increases the probability of donating money, and it also increases the amount of money donated among those who donate at most £100. We also find that exposure to the IBC has increased the probability of volunteering and the level of interpersonal trust. However, all these results, except for the result on the intensive margins of donations, are of short duration and are limited to less than one year. This supports the prevalent consensus that social media campaigns may have only short-term eects.
    Keywords: donations, volunteering, altruism, social media campaigns, Ice Bucket Challenge
    JEL: D64 O35
    Date: 2023–03
  12. By: Maik Schmeling; Andreas Schrimpf; Karamfil Todorov
    Abstract: We document that the carry of crypto futures, i.e. the difference between futures and spot prices, can become very large (up to 60% p.a.) and varies strongly over time. This behavior is most consistent with the existence of a highly volatile crypto convenience yield that stems from two main forces: (i) trend-chasing and attention by smaller investors seeking leveraged upside exposure to crypto assets in boom periods, and (ii) the relative scarcity of "arbitrage" capital taking the other side through a cash and carry position. Engaging in the latter is risky due to spikes in margins and liquidations amid drawdowns. The interplay between these two forces, and the involved high leverage, may help explain why severe market crashes are a frequent feature of crypto markets.
    Keywords: Crypto, Carry, Futures basis, Crash risk, Bitcoin, Ethereum
    JEL: G12 G13 G15
    Date: 2023–04
  13. By: Sirui Li; Ying Liu; Jing Su; Xin Luo; Xiao Yang
    Date: 2022–05–05
  14. By: Alam, Md. Mahmudul (Universiti Utara Malaysia); Ibrahim, Yusnidah Bt; Sriyana, Jaka
    Abstract: Purpose: The credit card market is very large and segmented by targeting different types of consumers. One type of credit card is one that specifically targets people in the education sector, for instance students, teachers and other staff members. This study aims to compare the features of education and other credit cards in Malaysia. Design/methodology/approach: The study analyzes data concerning 234 credit cards by using descriptive statistics and one-way analysis of variance (ANOVA) test. Findings: Out of 234 credit cards, this study found only two credit cards especially target education sector customers. The study evaluated thirteen features of these credit cards and found that only two features are statistically significantly different from other conventional credit cards in Malaysia. These features are interest rate and cash withdrawal charge fees. Originality/value: This is an original study based on compilation of data from secondary sources. The findings will provide valuable insights to financial regulatory policy-makers, academics, and business managers.
    Date: 2022–03–08
  15. By: Antoine Dubus (D-MTEC - Department of Management, Technology, and Economics [ETH Zürich] - ETH Zürich - Eidgenössische Technische Hochschule - Swiss Federal Institute of Technology [Zürich]); Christine Halmenschlager; Patrick Waelbroeck
    Abstract: In this article, we show how freemium business models can deter piracy. We analyze a simple freemium model in which a firm offers both a free version and a premium version. The firm can restrict the use of the free version. Consumers can choose between the free and the premium version, but can also get an illegal digital copy. More restrictions can increase the number of premium users but divert other users to piracy. On the contrary, fewer restrictions deter online piracy. We show that with a low level of piracy, the firm sets a high level of restrictions on the free version, which makes the traditional premium business model more profitable than the freemium model. We therefore challenge the idea that strong copyright laws are necessary to protect digital markets. We argue that there are market solutions to fight free with free that better segment consumer audiences according to their willingness to pay for digital music.
    Keywords: Online piracy, versioning, freemium, streaming, copyright, music
    Date: 2023–02–16
  16. By: David H. Kreitmeir (SoDa Labs, Monash University); Paul A. Raschky (Department of Economics and SoDa Laboratories, Monash University)
    Abstract: We analyse the effects of the ban of ChatGPT, a generative pre-trained transformer chatbot, on individual productivity. We first compile data on the hourly coding output of over 8, 000 professional GitHub users in Italy and other European countries to analyse the impact of the ban on individual productivity. Combining the high-frequency data with the sudden announcement of the ban in a difference-in-differences framework, we find that the output of Italian developers decreased by around 50\% in the first two business days after the ban and recovered after that. Applying a synthetic control approach to daily Google search and Tor usage data shows that the ban led to a significant increase in the use of censorship bypassing tools. Our findings show that users swiftly implement strategies to bypass Internet restrictions but this adaptation activity creates short-term disruptions and hampers productivity.
    Keywords: chatgpt, productivity, internet, censorship, italy
    JEL: D72 D83 L86 L88
    Date: 2023–04
  17. By: Laura Felber; Simon Beyeler
    Abstract: In this paper, we assess the value of high-frequency payments data for nowcasting economic activity. Focusing on Switzerland, we predict real GDP based on an unprecedented 'complete' set of transaction payments data: a combination of real-time gross settlement payment system data as well as debit and credit card data. Following a strongly data-driven machine learning approach, we find payments data to bear an accurate and timely signal about economic activity. When we assess the performance of the models by the initially published GDP numbers (pseudo real-time evaluation), we find a state-dependent value of the data: the payment models slightly outperform the benchmark models in times of crisis but are clearly inferior in 'normal' times. However, when we assess the performance of the models by revised and more final GDP numbers, we find payments data to be unconditionally valuable: the payment models outperform the benchmark models by up to 11% in times of crisis and by up to 12% in 'normal' times. We thus conclude that models based on payments data should become an integral part of policymakers' decision-making.
    Keywords: Nowcasting, GDP, machine learning, payments data, COVID-19
    JEL: C52 C53 C55 E37
    Date: 2023
  18. By: Biliana Alexandrova Kabadjova; Anton Badev; Saulo Benchimol Bastos; Evangelos Benos; Freddy Cepeda- Lopéz; James Chapman; Martin Diehl; Ioana Duca-Radu; Rodney Garratt; Ronald Heijmans; Anneke Kosse; Antoine Martin; Thomas Nellen; Thomas Nilsson; Jan Paulick; Andrei Pustelnikov; Antoine Francisco Rivadeneyra; Mario Rubem do Coutto Bastos; Sara Testi
    Abstract: We study intraday liquidity usage and its determinants using a unique cross-country data set on large-value payments. We document that the amount of intraday liquidity that financial institutions around the world use each day equals, on average, 15% of their total daily payment values or 2.8% of their countries' GDP. We then define and calculate system-level measures of liquidity efficiency and inequality in liquidity provision. We show that these measures vary systematically with the degree of payment coordination among payment system participants, the quantity and opportunity cost of central bank reserves and institutional characteristics, such as incentives for early payment submission and liquidity saving mechanism (LSM) design. Our results are consistent with the notion that payment system participants behave strategically and manage intraday liquidity actively. Participants also appear to condition their payment behaviour on specific LSM characteristics, which may weaken some of the LSMs' intended effects.
    Keywords: large-value payment systems, liquidity, LSM, financial markets
    JEL: C5 E42 E58 G21 N2
    Date: 2023–04
  19. By: Andrea Barbon (University of St. Gallen; Swiss Finance Institute); Angelo Ranaldo (University of St. Gallen; Swiss Finance Institute)
    Abstract: By investigating nonfungible tokens (NFTs), we provide the first systematic study of retail investor behavior through asset bubbles. Given that NFTs are recorded in public blockchains, we are able to track investor behavior over time, leading to the identification of numerous price run-ups and crashes. Our study reveals that agent-level variables, such as investor sophistication, heterogeneity, and wash trading, in addition to aggregate variables, such as volatility, price acceleration, and turnover, significantly predict bubble formation and price crashes. We find that sophisticated investors consistently outperform others and exhibit characteristics consistent with superior information and skills, supporting the narrative surrounding asset pricing bubbles.
    Keywords: Financial Bubbles, Nonfungible Tokens, Agent-level, Blockchain
    JEL: G14 G12
    Date: 2023–03
  20. By: Na Hyeon Park; Hanna Kim; Chanhee Lee; Changhoon Yoon; Seunghyeon Lee; Youngjin jin; Seungwon Shin
    Abstract: NFT (Non-fungible Token) has drastically increased in its size, accounting for over \$16.9B of total market capitalization. Despite the rapid growth of NFTs, this market has not been examined thoroughly from a financial perspective. In this paper, we conduct methodical analyses to identify NFT market movers who play a significant role in potentially manipulating and oscillating NFT values. We collect over 3.8M NFT transaction data from the Ethereum Blockchain from January 2021 to February 2022 to extract trading information in line with the NFT lifecycle: (i) mint, (ii) transfer/sale, and (iii) burn. Based on the size of held NFT values, we classify NFT traders into three groups (whales, dolphins, and minnows). In total, we analyze 430K traders from 91 different NFT collection sources. We find that the top 0.1\% of NFT traders (i.e., whales) drive the NFT market with consistent, high returns. We then identify and characterize the NFT whales' unique investment strategies (e.g., mint/sale patterns, wash trading) to empirically understand the whales in the NFT market for the first time.
    Date: 2023–02
  21. By: Mustansar, Talreja
    Abstract: An increasing trend of development in the financial system, with the use of information technology and the modernization of products and services, has led to financial innovation being considered one of the most important topics in the research community. The paper discusses the role of financial innovation and its importance in the modern financial system. We have proxied financial innovation in three dimensions, namely Fintech infrastructure, Fintech number of transactions, and Fintech amount of transactions; and we have tested the impact of these financial innovation variables, along with some control variables, on the profitability of the banking system. The study uses time series data from 2008 Q1 to 2021 Q4 and the ARDL Bounds test for analysis purposes. Using the ARDL model, a few proxies (LATM, ADVTODEP, COSTTOINC, NETNPLTONETLOAN, POSTRAM) of financial innovation demonstrate a positive and significant relationship in long run implying that financial innovation has an effect on the profitability of the financial sector in long run.
    Date: 2023–03–14
  22. By: Andrej Sokol; Michael Kumhof; Marco Pinchetti; Phurichai Rungcharoenkitkul
    Abstract: We study the consequences for business cycles and welfare of introducing an interest-bearing retail CBDC, competing with bank deposits as medium of exchange, into an estimated 2-country DSGE environment. According to our estimates, financial shocks account for around half of the variance of aggregate demand and inflation, and for the bulk of the variance of financial variables. CBDC issuance of 30% of GDP increases output and welfare by around 6% and 2%, respectively. An aggressive Taylor rule for the interest rate on reserves achieves welfare gains of 0.57% of steady state consumption, an optimized CBDC interest rate rule that responds to a credit gap achieves additional welfare gains of 0.44%, and further gains of 0.57% if accompanied by automatic fiscal stabilizers. A CBDC quantity rule, a response to an inflation gap, CBDC as generalized retail access to reserves, and especially a cash-like zero-interest CBDC, yield significantly smaller gains. CBDC policies can substantially reduce the volatilities of domestic and cross- border banking flows and of the exchange rate. Optimal policy requires a steady state quantity of CBDC of around 40% of annual GDP.
    Keywords: central bank digital currencies, monetary policy, bank deposits, bank loans, monetary frictions, money demand, money supply, credit creation
    JEL: E41 E42 E43 E44 E52 E58 F41
    Date: 2023–04
  23. By: Koski, Heli; Kuikkaniemi, Kai; Pantzar, Mika
    Abstract: Abstract This article empirically explores whether and how providing consumers with detailed access to their past food purchase data at different levels of aggregation affects their subsequent food purchase behavior. We employ unique data covering more than 84, 000 quarterly observations on Finnish consumers’ purchases of various food items from August 2018 to January 2021, as well as their usage of a digital application that provides past purchase data. The data indicate that a digital feedback application that provides consumers with detailed visual and numerical information about their past food item purchases, including both monetary and health-related measures, can impact their future purchase patterns. We find apparent food item-specific and sex-, age- and household-type-specific differences in the ways that the usage of digital feedback applications affects consumers’ food purchase patterns. We find that the feedback system’s usage had the most noticeable and comprehensive impact on the purchase of fruit and vegetables, which was its most promoted and salient feature and provided more detailed purchase information than that for any other food category since the launch of the feedback system. Our empirical findings thus indicate that information salience does matter.
    Keywords: Behavioral economics, Consumer choice, Bounded rationality, Salience, Food purchases, Digital feedback applications, Nudging
    JEL: D12 D83 D9 O33
    Date: 2023–04–18
  24. By: Michael Kumhof; Marco Pinchetti; Phurichai Rungcharoenkitkul; Andrej Sokol
    Abstract: We study the consequences for business cycles and welfare of introducing an interest-bearing retail CBDC, competing with bank deposits as medium of exchange, into an estimated 2-country DSGE environment. According to our estimates, financial shocks account for around half of the variance of aggregate demand and inflation, and for the bulk of the variance of financial variables. CBDC issuance of 30% of GDP increases output and welfare by around 6% and 2%, respectively. An aggressive Taylor rule for the interest rate on reserves achieves welfare gains of 0.57% of steady state consumption, an optimized CBDC interest rate rule that responds to a credit gap achieves additional welfare gains of 0.44%, and further gains of 0.57% if accompanied by automatic fiscal stabilizers. A CBDC quantity rule, a response to an inflation gap, CBDC as generalized retail access to reserves, and especially a cash-like zero-interest CBDC, yield significantly smaller gains. CBDC policies can substantially reduce the volatilities of domestic and cross- border banking flows and of the exchange rate. Optimal policy requires a steady state quantity of CBDC of around 40% of annual GDP.
    Keywords: Central bank digital currencies; Monetary policy; Bank deposits; Bank loans; Monetary frictions; Money demand; Money supply; Credit creation
    JEL: E41 E42 E43 E44 E52 E58 F41
    Date: 2023–04
  25. By: Bertrand Crettez (CRED - Centre de Recherche en Economie et Droit - UP2 - Université Panthéon-Assas); Marie Obidzinski (CRESE - Centre de REcherches sur les Stratégies Economiques (UR 3190) - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE], CRED - Centre de Recherche en Economie et Droit - UP2 - Université Panthéon-Assas)
    Abstract: Should the advent of the blockchain lead to the reorganization or even the replacement of traditional land title registration systems? In addressing this issue we first generalize the model developed by Arrunada and Garoupa (2005) to study optimal land titling systems. Instead of considering only recording and registration alone, we examine an a priori infinite set of systems, each characterized by its quality (the probability that there is no forfeiture for a given plot of land) and its unit transaction cost. In this respect, the blockchain is viewed as a cost-efficient mechanism, albeit one potentially jeopardized by hacking. We find that, despite the introduction of the blockchain, under some reasonable assumptions it is still socially optimal to maintain traditional public registration. In that case, the optimal quality of protection provided by traditional registration must be either sufficiently high (and higher than that of the blockchain), or low enough (and lower than that of the blockchain). Yet under another set of assumptions, it is optimal to rely on the blockchain alone and to abandon traditional registration.
    Keywords: Blockchain, Land titling, Forfeiture
    Date: 2021–07–15
  26. By: Arthur Juet (LEDA-LEGOS - Laboratoire d’Economie et de Gestion des Organisations de Santé - LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We evaluate the controversial aspect of a new vaccination policy announcement in France on Twitter. The objective is to approach the degree of controversy generated by the announcement of a mandatory vaccination policy for children by analyzing the reactions on social networks. Indeed, social networks allow individuals to express themselves publicly on a subject. They provide a platform that reflects public debates, opinions and feelings on a given topic. Thus, we collect tweets around the date of announcement on other similar announcement in Europe and also on other policies with daily binding characteristics in France. We compare the pattern of reactions in order to distinguish if France is particularly sensitive to this type of statements and also to understand if the controversy is due to the topic or to the constraining aspect. We find that online reactions to the vaccination policy announcement last longer over time than other announcements. We use the trend momentum (TM) concept to analyse the magnitude of the reactions after announcements. We first conclude to a higher level of sensitivity on this topic in France compared to identical announcements that have been done in Italy and Germany. The results also indicate a higher intensity of reactions for policies reducing individual freedom in order to protect the population.
    Keywords: vaccination policy, social media, Twitter, DT LEDa-LEGOS
    Date: 2023–03–31
  27. By: Shekhar, Shiva (Tilburg University, School of Economics and Management)
    Date: 2022
  28. By: José Liberti (De Paul University and Northwestern University); Jason Sturgess (Queen Mary University of London); Andrew Sutherland (MIT Sloan School of Management)
    Abstract: We use the introduction of a U.S. commercial credit bureau to study when lenders adopt voluntary information sharing technology and the resulting consequences for competition and credit access. Our results suggest that lenders trade off access to new markets against heightened competition for their own borrowers. Lenders that do not share initially lose borrowers to competitors that share, which ultimately compels them to share and leads to the formation of an information sharing system. We find access to credit improves but only for high-quality borrowers in markets with greater lender adoption. Our results offer the first direct evidence on when financial intermediaries adopt information sharing technologies and how sharing systems form and evolve.
    Keywords: information sharing, access to credit, financial intermediation, fintech, SMEs.
    JEL: G21 G23 G32
    Date: 2021–06–01
  29. By: Pinitjitsamut, Montchai
    Abstract: This research study aims 1) to develop the computable general economic (CGE) model, 2) analyze the country-wide economic impact of the development of electronic transactions according to the 3 periods strategic operational plan of the Electronic Transactions Development Agency (ETDA) by using the CGE model and develop the optimal policies to increasing the digital transation share in the economy of Thailand. Thailand's digital economy has been expanding rapidly over the recent decade. The development of the country's electronic transactions through the application of digital technology drives country-wide economy, reconnect the value chain and increase the economic value throughout the value chain for all business sectors. This makes the ease of doing business in Thailand since the digital transactions can cut across the sectors and increase operation efficiency. Moreover, the competitiveness of the economy will be raised by developing security and reliable standards for digital technology applications and their effectively linking systems. In this regard, the development of economic models is required to conduct a study and analyzing the impact of the country's electronic transaction development policy and implementation. This study use three main national databases on “the use of information and communiccation technology of households 2019 (ICTH 2019)”, “the use of information and communication technology of business enterprises 2019 (ICTE 2019)” and “the socio-economic survey data 2019 (SES 2019)”. These databases are used to establish the Social Accounting Matrix (SAM) 2019 and modified a set of equations in the Computable General Equilibrium (CGE) model for entire system of Thai economy which the interactions among sectors are concerned. The scenarios for economic impacts foresight are developed according to the national electronic transaction development scheme (the 3 periods strategic operational plan) which are ETDA’s major resposibility to implement and drive towards goals. Besides, the brainstorming and in-depth interviews with relevant agencies and the development of policy implications are carried out by considering the finding impacts in the CGE model. In summary, the development of electronic transactions in Thailand may need to create new innovations, rebalance and continue to seek sustainable economic growth. Therefore, the public challenge goals and policies should focus on elevating electronic transactions in the first 5 years urgently by promoting the coverage at least 50% of the population or business, developing personnel potential and supporting the long-term continuous research. The policy implications are: 1) Promote electronic transactions 2) Develop the accessibility to electronic transactions for households, SMEs and Micro-enterprises 3) Invest in the digital infrastructure to support electronic transactions; and 4). Establish an operational center to support electronic transactions.
    Keywords: Computable General Equilibrium, Electronic transaction, Digital economy
    JEL: C68 O1 O14 O25 O47 O50
    Date: 2023–03–25
  30. By: Daniel Fried
    Abstract: The U.S. dollar plays an important role as the most widely used currency in global goods, services, and financial markets. Strong international demand for U.S. dollars and dollar-denominated assets associated with the dollar’s status as an international currency has increased the value of the dollar in foreign exchange markets and the value of dollar-denominated assets in financial markets. As a result, the dollar’s status has contributed to persistent U.S. trade deficits and, by lowering interest rates, to increased access to credit for U.S. households, businesses, and the
    JEL: E58 F30 F31 F33
    Date: 2023–04–17
  31. By: Sagit Bar-Gill; Erik Brynjolfsson; Nir Hak
    Abstract: As more and more activities in the economy become digitized, analytics and data-driven decision-making (DDD) are becoming increasingly important. The adoption of analytics and DDD has been slower in small-to-medium enterprises (SMEs) compared to large firms, and reliable causal estimates of the impacts of analytics tools for small businesses have been lacking. We derive experiment-based estimates of the effect of an analytics tool on SME outcomes, analyzing the randomized introduction of eBay’s Seller Hub (SH), a data-rich seller dashboard. We find that SH adoption is associated with increased DDD, and that access to SH increases e-retailers’ revenues by 3.6% on average, as more items are transacted and service quality increases, without increases in average prices. Our results suggest that analytics and DDD help SMEs establish a competitive advantage. Managerial practices play an important role in reaping the benefits from the analytics dashboard, as over a third of the SH impact is driven by active performance monitoring. This suggests that digital platforms could increase revenues by supporting the adoption of analytics tools by SMEs. Furthermore, policies supporting small businesses' transition to the data era could address gaps in analytics and data-driven decision-making (DDD) by providing access to tools such as SH, as well as offering appropriate managerial training.
    JEL: L1 L86 M15 M3 O3 O30
    Date: 2023–03
  32. By: Pereira, Rafael H. M.; Herszenhut, Daniel; Saraiva, Marcus; Farber, Steven
    Abstract: Ride-hailing services have the potential to expand access to opportunities, but out-of-pocket costs may limit the benefits of ride-hail for low-income individuals. This paper examines how ride-hailing services can shape spatial and socioeconomic differences in access to opportunities while accounting for the trade-off between travel time and monetary costs. Using one year of aggregate Uber trip data for Rio de Janeiro in 2019 and a new multi-objective optimization routing method, we analyze the potential for ride-hailing services to improve employment accessibility when used as a standalone transportation mode and in conjunction with transit as a first-mile feeder service. We compare the accessibility Pareto frontiers of these transport mode alternatives with cumulative opportunity measures considering multiple combinations of travel time and monetary cost thresholds. We find that, compared to transit, ride-hailing can significantly expand accessibility as a standalone transport mode for relatively short trips (between 10 and 40 minutes), and as a first-mile feeder to transit in trips longer than 30 minutes. In both cases, the accessibility advantages of ride-hailing are mostly limited by relatively higher out-of-pocket costs. When we account for different affordability thresholds, the accessibility benefits of ride-hailing services accrue mostly to high-income groups. These findings suggest that policy efforts to integrate rideshare with transit are likely not going to benefit low-income communities without some form of subsidized fare discounts to alleviate affordability barriers. The paper also highlights how accounting for trade-offs between travel-time and monetary costs can importantly influence the results of transportation accessibility and equity studies, suggesting that this issue should be addressed in future research.
    Date: 2023–03–23
  33. By: Natalia Vershinina (Audencia Recherche - Audencia Business School); Nichola Phillips (DMU - De Montfort University [Leicester, United Kingdom]); Maura Mcadam (DCU - Dublin City University [Dublin])
    Abstract: Informed by contributions of Professor Alistair Anderson to the social perspective of entrepreneurship, rooted in social relationships and social capital, this article examines how members of an online community collectively interpret and negotiate the challenges of pursuing entrepreneurship alongside parenthood. This article adopts a multi-staged research design, incorporating netnography, participant observation, and qualitative semi-structured interviews. The analysis reveals the critical role of networking in how entrepreneuring women construct and maintain community connections and distinguishes between three dimensions of community engagement: Building, Being and Belonging. Drawing on communities of practice as an analytical lens, we offer new insights into the form and function of communal entrepreneurial practices facilitated by the digital environment.
    Keywords: Entrepreneurship, motherhood, online communities, communities of practice, gender
    Date: 2022–06–06
  34. By: Henri-Paul Rousseau
    Abstract: The purpose of this paper is to better understand the magnitude of the challenge that the digital world poses to the academic community and to propose some ideas that can help academics in their efforts to adapt to the digital world. The impact of the digital revolution on the world of university education can be summarized as follows: in a digital world, knowledge is accessible and, all in all, at very low cost, whereas the level and types of skills required to evolve in a digital world are more complex. The university has lost its quasi-monopoly in the transmission of this knowledge and has not yet established its indispensable role in the acquisition of new skills. The university is also threatened in its traditional capacity to attract, retain and promote the artisans of tomorrow's world who are increasingly active in ecosystems driven and even often controlled by the big industrial winners of the digital revolution. A reflection and a discussion are necessary. The digital world being a world of data, information and knowledge, this world can only be the natural world of the community of professors, teachers, researchers and students. The digitization of education is a unique opportunity to make it more accessible to as many people as possible. Le but de ce texte est de mieux cerner l’ampleur du défi que pose le monde numérique au milieu universitaire et de proposer quelques idées pouvant alimenter la réflexion des universitaires dans cette démarche d’adaptation au monde numérique. L’impact de la révolution numérique sur le monde de l’éducation universitaire peut se résumer à ceci : dans un monde numérique, les connaissances sont accessibles à tous et, somme toute à très faibles coûts alors que le niveau et les types de compétences requises pour évoluer dans un monde numérique sont plus complexes. L’université a perdu son quasi-monopole dans la transmission des connaissances et elle n’a pas encore établi pleinement son rôle, pourtant indispensable, dans l’acquisition des nouvelles compétences. L’université est également menacée dans sa capacité historique d’attirer, de retenir et de promouvoir les artisans du monde de demain qui sont de plus en plus actifs dans les écosystèmes animés et même souvent contrôlés par les grands gagnants industriels de la révolution numérique. Une réflexion et une discussion s’imposent. Le monde numérique étant un monde de données, d’information et de savoir, ce monde ne peut être que le monde naturel de la communauté des professeurs, des maîtres, des chercheurs et des étudiants. La numérisation de l’éducation est une chance unique pour le rendre plus accessible au plus grand nombre.
    Keywords: ChatGPT, Covid and education, Digital revolution, invention of the printing press, learning to learn, universal university model, university, Apprendre à apprendre, ChatGPT, covid et éducation, Edtech, Gutenberg, Invention de l'imprimerie, modèle universel de l'université, révolution numérique, université
    Date: 2023–04–17
  35. By: Carola Frydman; Chenzi Xu
    Abstract: This paper surveys the recent empirical literature on historical banking crises, defined as events taking place before 1980. Advances in data collection and identification have provided new insights into the causes and consequences of crises both immediately and over the long run. We highlight three overarching threads that emerge from the literature: first, leverage in the financial system is a systematic precursor to crises; second, crises have negative effects on the real economy; and third, government interventions can ameliorate these effects. Contrasting historical episodes reveals that the process of crisis formation and evolution does vary significantly across time and space. Thus, we also highlight specific institutions, regulations and historical contexts that give rise to these divergent experiences. We conclude by identifying important gaps in the literature and discussing avenues for future research.
    JEL: E44 E58 G01 G21 N10 N20
    Date: 2023–03

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.