nep-pay New Economics Papers
on Payment Systems and Financial Technology
Issue of 2023‒06‒26
forty papers chosen by

  1. Decentralized finance – How triple-entry accounting and distributed ledger technology is revolutionizing the world of financial services from a business perspective By Schuldt, Lennart T.; Peskes, Markus
  2. Big Tech, the platform economy and the European digital markets By Brühl, Volker
  3. Female unemployment, mobile money innovations and doing business by females By Simplice A. Asongu; Nicholas M. Odhiambo
  4. Blockchain analysis of the Bitcoin market By Makarov, Igor; Schoar, Antoinette
  5. Female unemployment, mobile money innovations and doing business by females By Asongu, Simplice A; Odhiambo, Nicholas M
  6. Real Estate Security Token Offerings and the Secondary Market: Driven by Crypto Hype or Fundamentals? By Kreppmeier, Julia; Laschinger, Ralf; Steininger, Bertram; Dorfleitner, Gregor
  7. Bitcoin: the three ages of an unclassifiable object By Assen Slim
  8. CBDC: Lesson from a Historical Experience By Grodecka-Messi, Anna; Zhang, Xin
  9. MONEY VELOCITY, DIGITAL CURRENCY, AND INFLATION DYNAMICS By Danny Hermawan Adiwibowo; Aryo Sasongko; Denny Lie
  10. Global PeaceTech: Unlocking the Better Angels of our Techne By Kalypso Nicolaidis; Michele Giovanardi
  11. Is Mobile Money Changing Rural Africa? Evidence from a Field Experiment By Batista, Catia; Vicente, Pedro C.
  12. What is mature and what is still emerging in the cryptocurrency market? By Stanis{\l}aw Dro\.zd\.z; Jaros{\l}aw Kwapie\'n; Marcin W\k{a}torek
  13. Network Topology in Decentralized Finance By Saengchote, K; Castro-Iragorri, C
  14. What determines demand for digital community currencies? OurVillage in Cameroon By Pédussel Wu, Jennifer; Metzger, Martina; Neira, Ignacio Silva; Farroukh, Arafet
  15. Crowdfunding and Risk By David Cimon
  16. Destabilizing digital "bank walks" By Koont, Naz; Santos, Tano; Zingales, Luigi
  17. Common ownership in fintech markets By Tzanaki, Anna; Alekseeva, Liudmila; Azar, José
  18. Stablecoins: Adoption and Fragility By Bertsch, Christoph
  19. Finanzielle Allgemeinbildung, Finanzielle Inklusion, FinTech und SDG: Ein holistischer Rahmen By Treu, Johannes
  20. Biometric Identification: Opportunities and Challenges in the Digital World By Nicoleta-Elena Heghes
  21. The digital euro: A precautionary device, not a deus ex machina By Angeloni, Ignazio
  22. Quasi-experimental network-based design for semantic analysis of small clusters of bi-polar online reviews By Cantone, Giulio Giacomo; Tomaselli, Venera
  23. Ratings and Reciprocity By Johnen, Johannes; Ng, Robin
  24. How Different Digital Marketing Techniques Drive and Empower Sneakerhead Purchasing Behaviors: A Theoretical Literature Review By Greg Grovey, Diana Garza; Greg Grovey, Diana Garza
  25. Sharing my place: the local labor market impact of the P2P technology shock By Ismael Gálvez-Iniesta; José L. Groizard; Ferran Portella-Carbó
  27. Online Sales Impact on Management Strategies in Times of Pandemic By Oana Horhogea
  28. Being close(d): How community management on closed media channels contributes to social capital By Rettler, Lennart; Röttger, Ulrike; Viertmann, Christine
  29. Dissertation on Applied Microeconomics of Freemium Pricing Strategies in Mobile App Market By Naixin Zhu
  30. Transformation digitale et transformation structurelle dans les économies d’Afrique Sub-Saharienne (ASS) : les effets variés des technologies de l’information et de la communication (TIC) By Mbondo, Georges Dieudonné; Bouwawe, Duclo
  31. The financial inclusion status of rural households in Eswatini By Nkambule, Maxwell Banele
  32. The role of digital nomadism in COVID-19 recovery strategy of the tourism sector: Case of Cape Town, South Africa By Makoza, Frank
  33. Occupational segregation in the digital economy? A Natural Language Processing approach using UK Web Data By Occhini, Giulia; Tranos, Emmanouil; Wolf, Levi John
  34. Teaching Open Science Analytics in the Age of Financial Technology By Quinn, Barry
  35. Minority Ethnic Vulnerabilities in the Use of Digital Housing Services Across Age Groups By Hasan, Sacha; Yuan, Yingfang
  36. The Metaverse: technology, financing and economics By Pier Luigi Parcu; Niccolo' Galli; Chiara Carozza
  37. Technology as deregulation By Djankov, Simeon; Luksic, Igor; Zhang, Eva
  38. Fed Communication, News, Twitter, and Echo Chambers By Bennett Schmanski; Chiara Scotti; Clara Vega
  39. The role of financial inclusion in moderating the incidence of entrepreneurship on energy poverty in Ghana By Simplice A. Asongu; Nicholas M. Odhiambo
  40. Female access to finance: A survey of literature By Pavlova, Elitsa; Gvetadze, Salome

  1. By: Schuldt, Lennart T.; Peskes, Markus
    Abstract: Decentralized finance (DeFi) is a rapidly growing science that leverages distributed ledger technology (DLT) to offer peer-to-peer financial services. The DeFi ecosystem consists of decentralized applications that range from traditional financial services like decentralized stock exchanges (DEX) and lending platforms to novel services like flash loans. By eliminating the need for intermediaries and leveraging the public design of DLT networks, DeFi offers a more efficient, transparent, and accessible financial system. This results in lower transaction costs, higher control for users, and increased accessibility. The interoperable nature of DeFi applications enables the creation of new applications and financial services through the use of existing applications, which leads to a high degree of comparability and flexibility, allowing network participants to efficiently execute services. However, there are also barriers to the wider adoption of DeFi, such as the unsettled regulation in many countries, and the current user experience, which requires technical expertise and is less user-friendly than traditional centralized financial services. The strong adoption of DeFi by individuals and surveys indicating growing interest in DeFi by businesses will likely lead to these barriers being overcome as the user base grows. Despite the volatility of the crypto market, the trend of increasing adoption of DeFi applications is evident and reflected in an increasing number of users, projects, market capitalization of projects, and total value locked. Thus, DeFi is creating a decentralized financial system in parallel with the traditional centralized system, depriving it of a growing amount of resources.
    Keywords: Finance, Decentralized Finance, Controlling, DeFi, triple-entry accounting, accounting, financial services, distributed ledger technology
    JEL: G23 G2 M16 M21
    Date: 2023
  2. By: Brühl, Volker
    Abstract: Digital platforms have become an important part of the digital economy by facilitating transactions between large numbers of users and by fostering innovation on collaborative platforms. In combination with technical platform services, some platform operators have managed to create powerful ecosystems that create network externalities and benefit from economies of scale and economies of scope. It is striking that, due to the specific economic drivers of the digital infrastructure, platform-based or platform-related services are dominated by a select number of global players. Most of the global platform operators are headquartered in the US, including Alphabet, Amazon, Apple, Meta and Microsoft, also known as the "Big 5". Some are located in Asia (e.g. Alibaba, Tencent). In Europe there are only a limited number of platform operators with a small market share. [...]
    JEL: L14 L22 L25
    Date: 2023
  3. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: The purpose of this study is to complement extant literature by examining how mobile money innovations can moderate the unfavorable incidence of female unemployment on female doing of business in 44 countries from sub-Saharan Africa for the period 2004 to 2018. The empirical evidence is based on interactive quantile regressions. The employed doing business constraints are the procedures a woman has to go through to start a business and the time for women to set up a business, while the engaged mobile money innovations are: (i) registered mobile money agents (registered mobile money agents per 1000 km2 and registered mobile money agents per 100 000 adults) and (ii) active mobile money agents (active mobile money agents per 1000 km2 and active mobile money agents per 100 000 adults). The hypothesis that mobile money innovation moderates the unfavorable incidence of female unemployment on business constraints is overwhelmingly invalid. The invalidity of the tested hypothesis is clarified, and the policy implications are discussed.
    Keywords: Mobile phones; financial inclusion; women; doing business; sub-Saharan Africa
    JEL: G20 O40 I10 I20 I32
    Date: 2023–01
  4. By: Makarov, Igor; Schoar, Antoinette
    Abstract: In this paper, we provide detailed analyses of the Bitcoin network and its main participants. We build a novel database using a large number of public and proprietary sources to link Bitcoin addresses to real entities and develop an extensive suite of algorithms to extract information about the behavior of the main market participants. We conduct three major pieces of analysis of the Bitcoin eco-system. First, we analyze the transaction volume and network structure of the main participants on the blockchain. Second, we document the concentration and regional composition of the miners which are the backbone of the verification protocol and ensure the integrity of the blockchain ledger. Finally, we analyze the ownership concentration of the largest holders of Bitcoin.
    JEL: G12 G15 F30
    Date: 2021–10–27
  5. By: Asongu, Simplice A; Odhiambo, Nicholas M
    Abstract: The purpose of this study is to complement extant literature by examining how mobile money innovations can moderate the unfavorable incidence of female unemployment on female doing of business in 44 countries from sub-Saharan Africa for the period 2004 to 2018. The empirical evidence is based on interactive quantile regressions. The employed doing business constraints are the procedures a woman has to go through to start a business and the time for women to set up a business, while the engaged mobile money innovations are: (i) registered mobile money agents (registered mobile money agents per 1000 km2 and registered mobile money agents per 100 000 adults) and (ii) active mobile money agents (active mobile money agents per 1000 km2 and active mobile money agents per 100 000 adults). The hypothesis that mobile money innovation moderates the unfavorable incidence of female unemployment on business constraints is overwhelmingly invalid. The invalidity of the tested hypothesis is clarified, and the policy implications are discussed.
    Keywords: Mobile phones; financial inclusion; women; doing business; sub-Saharan Africa
    Date: 2023–05
  6. By: Kreppmeier, Julia (University of Regesburg, Germany); Laschinger, Ralf (University of Regensburg, Germany); Steininger, Bertram (Department of Real Estate and Construction Management, Royal Institute of Technology); Dorfleitner, Gregor (University of Regensburg, Germany)
    Abstract: Tokens, the digital form of assets, are an innovation that has the potential to disrupt how to transfer and own financial instruments. We hand-collected data on 173 real estate tokens in the USA between 2019 and 2021 and trace back 238, 433 blockchain transactions. We find that tokens provide broad real estate ownership to many small investors through digital fractional ownership and low entry barriers, while investors do not yet hold well-diversified real estate token portfolios. We analyze the determinants of the success of security token offerings (STOs), secondary market trading, and daily aggregated capital flows. In addition to some property-specific determinants, we find that crypto-market-specific determinants, such as transaction costs and the related sentiment, are relevant both to the STO and capital flows.
    Keywords: digital asset; security token offering (STO); real estate token; blockchain; distributed ledger technology (DLT); decentralized finance
    JEL: G24 G32 K22 L26 M13
    Date: 2023–06–09
  7. By: Assen Slim (CESSMA UMRD 245 - Centre d'études en sciences sociales sur les mondes africains, américains et asiatiques - IRD - Institut de Recherche pour le Développement - Inalco - Institut National des Langues et Civilisations Orientales - UPCité - Université Paris Cité, CREE EA 4513 - Centre de recherches Europes-Eurasie - Inalco - Institut National des Langues et Civilisations Orientales)
    Abstract: This article proposes a so-called "factual" method (units issued, governance, functions, distribution, regulation, circulatory sphere, adoption by sovereign states, diffusion to new uses) to determine the nature of bitcoin. It quickly becomes clear that bitcoin is an unclassifiable object (a UO) that does not fit into any pre-established framework (currency, asset, digital gold, property title) and that it boasts an evolutionary character that has already taken it through three stages of aging (birth, growth, adulthood). Configurable at will, bitcoin and its derivatives can be used by human groups for better or for worse. The article outlines three pathways for using cryptocurrencies in the future (financial inclusion, socialization of value, and exit from the Uber society).
    Abstract: Este artículo propone un método denominado "fáctico" (unidades emitidas, gobernanza, funciones, distribución, regulación, esfera circulatoria, adopción por Estados soberanos, difusión a nuevos usos) para determinar la naturaleza del bitcoin. De él se desprende que bitcoin es un objeto inclasificable (un OI) que no encaja en ningún marco preestablecido (moneda, activo, oro digital, título) y que tiene un carácter evolutivo que ya le ha llevado a través de tres edades (nacimiento, crecimiento, edad adulta). Al poder configurarse a voluntad, el bitcoin y sus derivados pueden ser utilizados por grupos humanos para bien o para mal. El artículo esboza tres formas en que las criptodivisas pueden utilizarse en el futuro (inclusión financiera, socialización del valor, salida de la sociedad uber).
    Abstract: Cet article propose une méthode dite « factuelle » (unités émises, gouvernance, fonctions, répartition, réglementation, sphère circulatoire, adoption par des États souverains, diffusion à de nouveaux usages), pour déterminer la nature du bitcoin. Il ressort que le bitcoin est un objet inclassable (un OI) qui ne rentre dans aucun cadre préétabli (monnaie, actif, or numérique, titre de propriété) et qu'il revêt un caractère évolutif lui ayant déjà fait traverser trois âges (naissance, croissance, âge adulte). Étant paramétrables à volonté, le bitcoin et ses dérivés peuvent être utilisés par les groupes humains pour le meilleur et pour le pire. L'article esquisse trois pistes d'utilisation des cryptomonnaies pour l'avenir (l'inclusion financière, la socialisation de la valeur, la sortie de la société ubérisée).
    Keywords: Bitcoin, cryptocurrencies, blockchain, institutions, Financial inclusion., criptomonedas, instituciones, inclusión financiera, cryptomonnaies, inclusion financière
    Date: 2022–01–01
  8. By: Grodecka-Messi, Anna (Monetary Policy Department, Central Bank of Sweden); Zhang, Xin (Research Department, Central Bank of Sweden)
    Abstract: Central banks have been considering the introduction of central bank digital currencies (CBDCs). The theoretical literature indicates that this may influence private banks’ lending activity and their profitability with implications for financial stability. To provide empirical evi dence on this debate, we study the effects of the arrival of a new central-bank issued currency on commercial banks in a historical setup. We use the opening of the Bank of Canada in 1935 as a natural experiment to provide evidence that banks mostly affected by the currency competition experienced lower profitability but did not decrease their lending compared to unaffected peers.
    Keywords: Money and Banking; Central Bank Digital Currencies; Central Banks; Bank Profitability; Bank Lending; Bank of Canada; Banknote Monopoly
    JEL: E42 E50 G21 G28 N22
    Date: 2023–06–01
  9. By: Danny Hermawan Adiwibowo (Bank Indonesia); Aryo Sasongko (Bank Indonesia); Denny Lie (University of Sydney)
    Abstract: This paper empirically investigates the impact of transaction cost-induced varia- tions in the velocity of money on infation dynamics in Indonesia, based on a struc- tural New Keynesian Phillips curve (NKPC) with an explicit money velocity term. This money velocity effect arises from the role of money, both in physical and digital forms, in reducing the aggregate transaction cost and facilitating purchases of goods and services. We fnd a signifcant aggregate impact: our preferred estimates suggest that a 10% reduction in money velocity, which may be facilitated by a new digital currency (e.g. CBDC) issuance, would reduce the infation rate by 1%, all else equal. Using the estimates and within a small-scale, structural New Keynesian model, we investigate the likely implications of a CBDC issuance on aggregate nominal and real fuctua- tions. A CBDC issuance that (conservatively) lowers the velocity of money by 5% is predicted to permanently raise the GDP level by 0.8% and lower the infation rate by 0.8%. Both nominal and real interest rates are also permanently lower. Shocks to the velocity of money are an important driver of aggregate fuctuations.
    Keywords: inflation dynamics, transaction cost, velocity of money, digital money, digital currency, digital payments, central bank digital currency (CBDC).
    JEL: E31 E32 E42 E52 E58
    Date: 2022
  10. By: Kalypso Nicolaidis; Michele Giovanardi
    Abstract: The double-edged nature of technology pervades human history. Today, the potential for peace offered by the internet, social networks, mobile devices, digital identities, AI, blockchain, big data, geospatial information, is matched by the risks of disinformation, polarisation, online violence, surveillance, data privacy, cyber-attacks, and power concentration. Faced with this knife-edge between the bright and dark sides of disruptive technologies, how do we conjure up the better angels of our nature? Many agents for change around the world have sought to employ and regulate new technologies to foster peaceful processes under the aegis of “PeaceTech” initiatives. This paper introduces “Global PeaceTech” as a new field of social inquiry in the context of International Relations and Global Affairs, with the aim of analysing the global context in which these initiatives are embedded and interconnected, in order to draw prescriptive lessons. The deployment of technology for peace entails legal, political, economic, and ethical dilemmas that transcend national borders and require new models of transnational governance. By bringing together the world of “tech-for-good” and the field of international studies broadly defined as the study of patterns of global change, “Global PeaceTech” fills a gap at the intersection between peace studies and global governance and promotes policy innovation at the transnational level. The paper offers an overview of this agenda in four parts: Part I starts from the IR literature and explores the relationship between technology, peace and war. Part II defines the main differences between PeaceTech and Global PeaceTech. Part III sets out a new research agenda in Global PeaceTech, introducing core analytical concepts and research methods, and discussing its potential political and societal impact. In Part IV, we conclude by presenting a series of example of relevant research areas as a reference for further research in Global PeaceTech.
    Keywords: PeaceTech, Peacebuilding, Transnational Governance
    Date: 2022–11
  11. By: Batista, Catia (Nova School of Business and Economics); Vicente, Pedro C. (Nova School of Business and Economics)
    Abstract: Rural areas in Sub-Saharan Africa are typically underserved by financial services. Mobile money brings a substantial reduction in the transaction costs of remittances. We follow the introduction of mobile money for the first time in rural villages of Mozambique using a randomized field experiment. We find that mobile money increased migration out of these villages, where we observe lower agricultural activity and investment. At the same time, remittances received and welfare of rural households increased, particularly when facing geo-referenced village-level floods and household-level idiosyncratic shocks. Our work suggests that mobile money can accelerate urbanization and structural change in Sub-Saharan Africa.
    Keywords: mobile money, migration, remittances, investment, agriculture, structural change, technology adoption, insurance, Mozambique, Africa
    JEL: O12 O15 O16 O33 G20 R23
    Date: 2023–04
  12. By: Stanis{\l}aw Dro\.zd\.z; Jaros{\l}aw Kwapie\'n; Marcin W\k{a}torek
    Abstract: In relation to the traditional financial markets, the cryptocurrency market is a recent invention and the trading dynamics of all its components are readily recorded and stored. This fact opens up a unique opportunity to follow the multidimensional trajectory of its development since inception up to the present time. Several main characteristics commonly recognized as financial stylized facts of mature markets were quantitatively studied here. In particular, it is shown that the return distributions, volatility clustering effects, and even temporal multifractal correlations for a few highest-capitalization cryptocurrencies largely follow those of the well-established financial markets. The smaller cryptocurrencies are somewhat deficient in this regard, however. They are also not as highly cross-correlated among themselves and with other financial markets as the large cryptocurrencies. Quite generally, the volume V impact on price changes R appears to be much stronger on the cryptocurrency market than in the mature stock markets, and scales as $R(V) \sim V^{\alpha}$ with $\alpha \gtrsim 1$.
    Date: 2023–05
  13. By: Saengchote, K; Castro-Iragorri, C
    Abstract: The composability and anonymity of participants in Decentralized Finance pose significant challenges in understanding their interactions and the buildup of risk within the network. We map the interconnections among decentralized finance protocols using transactions among contracts and addresses, explore singlelayer and multiplex network properties and quantify the financial exposure of the most critical nodes. We observe scale-free properties similar to traditional financial networks, but the inclusion of user interactions and the influence of externally owned accounts yield distinct network characteristics. Furthermore, centrality measures and high-frequency metrics provide insights into systemically important participants and at-risk protocols, necessitating further research to develop robust risk measures. By identifying potential vulnerabilities and developing appropriate risk management strategies, the stakeholders can help ensure the stability and safety of decentralized finance as a viable alternative to traditional financial systems.
    Keywords: Blockchain; composability; networks
    JEL: G20 D85 D53 L14
    Date: 2023–06–07
  14. By: Pédussel Wu, Jennifer; Metzger, Martina; Neira, Ignacio Silva; Farroukh, Arafet
    Abstract: Community currency systems are now turning to digital methods to increase the social outreach of member households in remote areas, mitigate detrimental effects in times of crises, and promote community social cohesion. The resilience of digital community currency systems depends on a set of decisive factors including stability, sustainability, and technical functionality. OurVillage in Cameroon is a socio-economic project that aims to increase and promote economic activity through the introduction of a blockchain-based local community currency system. This paper explores the potential of electronic complimentary payment systems by examining the underlying motivations for consumer use based on their socio-economics characteristics. We develop a demand estimate for the community currency, concentrating on the underlying environmental conditions of the target population. A demand study is helpful in order to observe the optimal conditions for goods' consumption, in this case the community currency system. The resulting estimation provides fundamental insights into the quality of the project and the determinants for successful implementation. Our findings have important policy implications, particularly for communities intending to introduce their own digital community currency systems.
    Keywords: demand estimates, community currency, socio-economic development projects
    JEL: B4 C10 D02 E42 O12
    Date: 2023
  15. By: David Cimon
    Abstract: This paper examines the role of rewards-based and equity-based crowdfunding in funding new businesses. In this model, crowdfunding is a unique technology that serves as a real option for production and eliminates downside risk. It affords entrepreneurs who face uncertain consumer demand a viable means of funding new projects. Crowdfunding performs well for projects with a high variability in demand and a low probability of success. Conversely, crowdfunding does not perform well for large projects with little variability in demand or for projects where the production side is uncertain.
    Keywords: Digital currencies and fintech; Financial markets; Financial services
    JEL: G21 G24 G32
    Date: 2023–05
  16. By: Koont, Naz; Santos, Tano; Zingales, Luigi
    Abstract: We study the impact of digital banking on the value of the deposit franchise and the stability of the banking sector. Using the classification of digital banking in Koont (2023), we find that when the Fed funds rate increases deposits flow out faster and the cost of deposits increases more in banks with a digital platform. The results are similar for insured and non-insured deposits. Using the model of Drechsler et al. (2023c), we find that correcting for digital betas and deposit outflows results in a deposit franchise value that is 40% lower for digital-broker banks relative to a traditional bank without digital platform. We apply this analysis to Silicon Valley Bank (SVB) and find that the reduced value of the deposit franchise explains why SVB was insolvent in early March 2023, even before the bank run occurred.
    Date: 2023
  17. By: Tzanaki, Anna; Alekseeva, Liudmila; Azar, José
    Keywords: financial technology, ownership structure, institutional investor, private investment, competition law
    Date: 2023
  18. By: Bertsch, Christoph (Research Department, Central Bank of Sweden)
    Abstract: Stablecoins promise a stable and secure way to park funds in the crypto universe. However, stablecoin issuers are vulnerable to runs triggered by negative information about the quality and liquidity of their reserves, as well as custodial, operational, and technological risks. I propose a framework for analyzing the factors influencing stablecoin adoption and fragility, which offers insights for risk assessment and appropriate regulation, as well as new testable implications. Under the premise that payment preferences are heterogeneous across potential stablecoin holders, a wider adoption of stablecoins is associated with a destabilizing composition effect. Positive network effects mitigate the destabilizing composition effect, but they may also undermine the role of bank deposits as a means of payment. The marginal stablecoin adopter does not internalize these effects. Consequently, adoption is likely to be excessive. Factors that increase the issuer’s income from fees and seigniorage promote stability, as do congestion effects. A stablecoin lending market promotes both stability and adoption, if it is not undermined by speculation. The introduction of a moral hazard problem provides additional insights into reserve management and disclosure.
    Keywords: Stablecoins; money; payment preferences; financial stability; global games
    JEL: D83 E40 G01 G28
    Date: 2023–05–01
  19. By: Treu, Johannes
    Keywords: Finanzielle Allgemeinbildung, Finanzielle Inklusion, FinTech, Finanztechnologie und SDG
    JEL: G5 G20 G23 O39
    Date: 2023
  20. By: Nicoleta-Elena Heghes (Andrei Radulescu Legal Research Institute of Romanian Academy, Bucharest, Romania)
    Abstract: Biometrics involves automatic methods of recognizing individuals based on physical or behavioral characteristics. These methods include fingerprints, retina and iris scanning, hand and finger geometry, voice feature recognition and facial recognition. Biometric technologies have become the preferred solutions for a wide range of applications. Biometrics is already incorporated in national security solutions, such as improving airport security, border control, verifying identification documents and visas, preventing identity fraud. Electronic identification systems have several advantages over well-known traditional identification methods, namely paper documents or personal verification. They are safer, much more efficient and very convenient. Consequently, biometric recognition systems are now being implemented in many government applications, including electronic identity cards, electronic passports, but also civil applications such as logging into a PC, laptop, mobile phone, internet access, smartcard etc. Identification elements cannot be lost, forgotten or stolen, as happens with passwords, identity cards or bank cards, as physiological characteristics have the advantage of being relatively stable over time.
    Keywords: identity, identification, authentification, biometrics, biometric identification
    Date: 2023–04
  21. By: Angeloni, Ignazio
    Abstract: There is much discussion today about a possible digital euro (PDE). Is this attention exaggerated? Are "central bank digital currencies" (CBDCs) "a solution in search of a problem", as some have argued? This article summarizes the main facts about the PDE and concludes that, if the decision on adoption had to be taken today, the arguments against would outweigh those in favor. However, there may be future circumstances in which having a CBDC ready for use can indeed be useful. Therefore, preparing is a good thing, even if the odds of its usefulness in normal conditions are slim.
    Keywords: Digital, Euro, Financial Stability, Monetary Policy, Central Bank, CBDC, Banks
    Date: 2023
  22. By: Cantone, Giulio Giacomo; Tomaselli, Venera
    Abstract: In online platforms, users sign in and evaluate items (as movies, music, video games, etc) through a numeric score and a textual comment. The underlying structure of users and items configures a bipartite network. Sometimes the opinions of the users are split alongside political or cultural factions. As a result, these items exhibit bi-polar distributions of scores. This manuscript proposes a method of detection of Extremely Bi-polar Items (EBI), and, through a statistical matching of these with an ideal control group of other items, a method to adjust the semantic inference of patterns associated with them. Results of the semantic inference on 436 items and 152, 844 reviews from platform Metacritic confirm findings in literature on the polarising phenomenon of so-called Review Bomb: EBI are associated with reflexive behaviour around political controversies.
    Date: 2023–04–26
  23. By: Johnen, Johannes (Université catholique de Louvain, LIDAM/CORE, Belgium); Ng, Robin (Université catholique de Louvain, LIDAM/CORE, Belgium)
    Abstract: Evidence suggests online ratings and reviews are motivated by reciprocity. We incorporate a standard model of reciprocity into a model of ratings to capture that consumers are only willing to make the effort to rate a seller if this seller provides a sufficient value-for-money. Using this model, we explore how firms use prices to impact their own ratings. We show that firms harvest ratings: they offer lower prices in early periods to trigger consumers’ reciprocal behaviour and obtain a good rating and larger profits in the future. Because also low-quality firms harvest ratings, reciprocity makes ratings less-informative about quality. Based on this mechanism, (i) we argue that reciprocity-based ratings cause rating inflation; (ii) we show that a marketplace that facilitates ratings (e.g. through reminders, one-click ratings etc.) may get more ratings, but also less-informative ratings; (iii) a marketplace that screens the quality of sellers makes ratings less-informative if the screening is insufficient. We show that even as ratings become less-informative, consumers can benefit from lower prices. Nonetheless consumers prefer more-informative ratings than average sellers. We apply these results to characterise when a two-sided platform wants to facilitate ratings, and thereby undermines the informativeness of ratings and harms consumers.
    Keywords: Reciprocity ; Ratings and Reviews ; Digital Economy ; Reputation
    JEL: D21 D83 D90 L10
    Date: 2023–02–09
  24. By: Greg Grovey, Diana Garza (University of the Incarnate Word, United States); Greg Grovey, Diana Garza (University of the Incarnate Word, United States)
    Abstract: Marketing to consumers has become an art that needs to be further studied, particularly in the sneaker industry. The sneaker product category has exploded in the last few years, forcing retailers to be creative when developing marketing strategies. Technology has allowed consumers to be in control, extending their connection with a particular brand. Consumers have become digitally enabled and can shop at any time and on any channel. For brands to be successful, they must be able to realign their business around the consumer rather than the brand. The use of technology is a competitive force that strengthens competitiveness by using social media as an outlet to reach specific market segments, in this case, the Sneakerhead segment. Consumers will be attracted to brands that treat them intelligently and know their preferences creating a seamless experience at the time of purchase. This literature review will explore different types of marketing, as well as collaborations between brands and celebrities, and how these strategies can influence purchasing behavior.
    Keywords: digital marketing, hunger marketing, live-stream marketing,
    Date: 2023–04
  25. By: Ismael Gálvez-Iniesta (Universitat de les Illes Balears); José L. Groizard (Universitat de les Illes Balears); Ferran Portella-Carbó (Universitat de les Illes Balears)
    Abstract: The emergence of new digital business models, often called peer-to-peer (P2P) marketplaces, is transforming the accommodation industry. While its implications go beyond the industry, our knowledge of its aggregate impact is limited. This paper examines the effects of the P2P irruption on the local labor markets in Spain between 2016 and 2020. We exploit exogenous regulatory changes in short-term rentals (STRs) across different municipalities and periods to investigate the employment outcomes and job reallocation patterns in response to the P2P technology shock. We find that the growing penetration of P2P platforms has a significant positive effect on local job creation and reduction of unemployment, while also promoting long-term labor contracts. Notably, the magnitude of these employment gains varies based on specific municipality characteristics. For instance, smaller localities and those with less tourism activity experience more substantial employment gains, highlighting the relative strength of the creative destruction mechanisms at play. The P2P technology shock also produced a reallocation of resources across industries being complementary to other services, construction, and manufacturing, and substitute to agriculture.
    Keywords: employment, local labor markets, digital economy, technology adoption, regulation, rental markets.
    JEL: D5 E2 L5 L8 O3
    Date: 2023
  26. By: Solikin M. Juhro (Bank Indonesia); Denny Lie (University of Sydney); Atet Rizki Wijoseno (University of North Carolina); Mohammad Aly Fikry (Bank Indonesia)
    Abstract: This paper seeks to answer the following policy-relevant questions: (i) does the complementarity between monetary and macroprudential policies depend on the monetary and fiscal policy stances, and (ii) what is the likely aggregate effect of a central bank digital currency (CBDC) issuance on the existing central bank policy mix (CBPM) framework. We analyze these questions within a medium-scale Dynamic Stochastic General Equilibrium (DSGE) model for Indonesia with a non-trivial fiscal policy and a parsimonious CBDC effect. On the first question, we find that monetaryfiscal policy stances do matter for whether a macroprudential policy rule stabilizes business cycle fluctuations and is welfare-improving. It is still the case, however, a passive monetary, active fiscal regime (PMAF) is sub-optimal compared to the active monetary, passive fiscal (AMPF) regime counterpart. On the second question, we find that a CBDC issuance lowers the transaction costs and its effects on aggregate economic variables are similar to the effects of a permanent technological progress.
    Keywords: integrated policy framework, central bank policy mix, DSGE model for Indonesia, monetary-fiscal policy coordination, macroprudential-fiscal policy coordination, central bank digital currency (CBDC)
    JEL: E12 E32 E58 E61 E63 F41
    Date: 2022
  27. By: Oana Horhogea (Alexandru Ioan Cuza University, Romania)
    Abstract: Internationally, the pandemic represented a threat to the economy. Managers sensed that a threat to their companies was coming and worked to protect them. This protection has been directed at assets, customers and jobs. The impact of the pandemic has varied from sector to sector and company to company, exposing vulnerabilities. While before the pandemic the changes in a company associated with digitization were a major challenge, the closure of retail premises has led to a pressing need to reorganize and embrace online commerce as widely as possible by creating or multiplying online sales channels. The use of online sales channels became so important that it was soon followed by a new phase, of research, based on all the information collected from customers.
    Keywords: management strategies, pandemic, online sales, impact, companies
    Date: 2023–03
  28. By: Rettler, Lennart; Röttger, Ulrike; Viertmann, Christine
    Abstract: The concept of community management has become a significant corporate communications practice. However, users have recently been withdrawing from traditional social media and begun using closed media channels. Closed media channels are communication arenas with restricted access or barriers to entry. The new issue of our publication series Communication Insights explains how companies are using closed media channels for external communications. By analyzing 27 closed media channels by Germany's Top 50 most valuable brands and conducting eight expert interviews Lennart Rettler and Prof. Ulrike Röttger (University of Münster) gained insights into how channels with barriers to entry could be considered a real opportunity for corporate communications departments.
    Date: 2023
  29. By: Naixin Zhu
    Abstract: In my dissertation, I will analyze how the product market position of a mobile app affects its pricing strategies, which in turn impacts an app's monetization process. Using natural language processing and k-mean clustering on apps' text descriptions, I created a new variable that measures the distinctiveness of an app as compared to its peers. I created four pricing variables, price, cumulative installs, and indicators of whether an app contains in-app ads and purchases. I found that the effect differs for successful apps and less successful apps. I measure the success here using cumulative installs and the firms that developed the apps. Based on third-party rankings and the shape of the distribution of installs, I set two thresholds and divided apps into market-leading and market-follower apps. The market-leading sub-sample consists of apps with high cumulative installs or developed by prestigious firms, and the market-follower sub-sample consists of the rest of the apps. I found that the impact of being niche is smaller in the market-leading apps because of their relatively higher heterogeneity. In addition, being niche also impact utility apps differently from hedonic apps or apps with two-sided market characteristics. For the special gaming category, being niche has some effect but is smaller than in the market follower sub-sample. My research provides novel empirical evidence of digital products to various strands of theoretical research, including the optimal distinctiveness theory, product differentiation, price discrimination in two or multi-sided markets, and consumer psychology.
    Date: 2023–04
  30. By: Mbondo, Georges Dieudonné; Bouwawe, Duclo
    Abstract: This article examines the various effects of ICTs on the structural transformation of African economies. It uses a dynamic panel model based on the method of generalized moments in a system applied to a sample of 30 Sub-Saharan African countries covering the period 1995 - 2018. While the results show that, overall, ICTs promote the development of manufacturing industries and offer opportunities to diversify exports, they also show that their expansion is weak due to infrastructural and institutional constraints. It therefore appears that fixed telephone subscriptions and Internet users are positively correlated with industrialization, while mobile telephone subscriptions are positively correlated with export diversification. Promoting the establishment of an integrated digital ecosystem therefore seems necessary to accelerate the structural transformation of all African economies south of the Sahara.
    Keywords: digital transformation, structural change, information and communication technology, Sub-Saharan Africa
    JEL: L60 M15 O11 O33
    Date: 2023–06–03
  31. By: Nkambule, Maxwell Banele
    Abstract: Financial inclusion has become a focal point in nation building. It facilitates inclusive growth, which contributes significantly to the economic development of the rural poor. However, the existing financial inclusion dimension used by some researchers does not address the financial inclusion problem in a multidimensional manner in Eswatini. Researchers mostly measure financial inclusion using the access component, which does not provide a complete picture of financial inclusion. Some studies have investigated financial inclusion in Eswatini, but overlooked certain key factors that have been proven to assist in achieving a higher degree of financial inclusion for rural people. The determinants of financial inclusion in Eswatini, especially in rural households, have not been sufficiently addressed in the previous studies. To address the above shortcomings, this study assessed the financial participation, financial capability and financial well-being of rural households, and determined their contribution to financial inclusion. The study also examined the determinants of the financial inclusion of rural households. xii A stratified two-stage sampling procedure was utilised to sample 2148 rural homes, headed by both genders, from a Metadata of 2928 Eswatini FinScope Consumer Survey respondents. The Alkire-Foster method was used in this study to develop a multidimensional financial inclusion index. The study found that the financial exclusion rate for rural households is 69%, with financial adequacy among rural people being 37.24%. This indicates that not every rural household that has access to formal financial services is financially secure. The study also found that, the financial well-being domain contribute the most (59%) to the financial inclusion of the rural households as compared to financial participation (37%) and financial capability (46%). The study also found that there is lower contribution in the usage, consumer protection, financial situation, and financial resilience indicators when compared to formal access. The study also determined that age, marital status, source of income, education level, ease of access to formal financial services, and access to land were all positively associated with the financial inclusion status of rural households. Gender and association membership of the rural household, on the other hand, were not statistically significant, implying that these factors gave fewer opportunities for rural households to participate in financial inclusion. It is on that score that this study recommends measuring financial inclusion not only by formal bank account ownership, but also by the level of financial participation, financial capability, and financial well-being among rural households. There is also a need to examine financial literacy as a policy tool for encouraging rural households, particularly those of marginalised groups such as rural youth and women, to participate in the access and use of formal financial services. There is also a need for a robust approach to ensure that all women residing in rural areas are financially included by simplifying the requirements for accessing formal financial services.
    Keywords: Financial Economics, Community/Rural/Urban Development
    Date: 2022–07
  32. By: Makoza, Frank
    Abstract: The COVID-19 pandemic travel restrictions affected the tourism sector in South Africa. Digital nomadism is an example of a new strategy that can help the tourism sector recover from the effects of the COVID-19 pandemic. This paper explores government strategies for promoting digital nomadism in the tourism sector. The study used the case of the city of Cape Town to analyse secondary data, e.g., government strategies and media reports using thematic analysis. The findings showed that digital nomadism has the potential to promote innovation, new ways of working, and job creation. However, there are also challenges that recovery strategies must address for digital nomadism to be successful, e.g., delays in the introduction of remote work visas and the lack of clarity about digital taxation. The study contributes to the understanding of the benefits and challenges of digital nomadism in the context of developing countries.
    Keywords: Digital nomadism, COVID-19 pandemic, Tourism sector, Economic recovery, Cape Town, South Africa
    Date: 2023
  33. By: Occhini, Giulia; Tranos, Emmanouil; Wolf, Levi John (University of Bristol)
    Abstract: This paper investigates whether and how occupational segregation affects the digital economy. Despite the continuous growth of entrepreneurial activity in the digital, little is known about the demographic characteristics of people actively engaging with it and bene ting from it. Further, while popular discourse portrays the digital as a \level playing eld" for economic engagement, the literature has yet to empirically test these claims. Gaining a better understanding of whether occupational segregation is replicated in the digital can assist us in bridging new types of digital inequalities and demystify meritocratic narratives around success in the digital economy. To address this question, we use textual data extracted from UK commercial websites and model digital economic activities through Natural Language Processing techniques. We compare our findings across different gender and ethnicity groups, adopting a research framework informed by intersectionality theory. Our results indicate that occupational segregation persists in the digital economy, as male and female entrepreneurs tend to engage with economic activities stereotypically associating with their gender. However, we do not find the same results when comparing entrepreneurial outputs of female and male entrepreneurs of colour. Our results pave the way for more research in entrepreneurship using Natural Language Processing, textual data and analyses at the intersectional level.
    Date: 2023–05–18
  34. By: Quinn, Barry
    Abstract: We consider the challenge of teaching open science analytics in finance in the computer age. There is a crisis of confidence in science; especially finance. We argue that the unstoppable algorithmic transformation of financial services and the nascent field of financial machine learning provide an opportunity to redesign finance programmes for the age of financial technology. We argue it is time for a rethink of how we can extract reliable statistical inference from financial data given the proliferation of computing, 'Big Data, ' and theunstoppable 'algorithmisation' of the finance industry. The paper begins by agnostically profiling the modelling paradigm choice. Next, we establish the developments in statistical inference in the computer age. Finally, we consider the idea of placing computation as acentral tenant in the finance curriculum and discuss the infrastructure and tools involved. We illustrate a use case where the infrastructure is on-boarded in a cloud computing suite with enterprise-level server software. We are not arguing that finance is computation, ratherby placing computation as a frictionless part of the curriculum, students can engage with the full suite of state-of-the-art inferential tools available to financial data science practitioners
    Date: 2022
  35. By: Hasan, Sacha; Yuan, Yingfang
    Abstract: Despite the accelerated digitalisation of social housing services, there has been a lack of focused attention to the harms that are likely to arise through the systemic inequalities encountered by minoritised ethnic (ME) communities in the UK. Within this context, we are employing an intersectional framework to underline the centrality of age to ME vulnerabilities including lack of digital literacy and proficiency in English in the access, use and outcomes of digitalised social housing services. We draw our findings from an interdisciplinary sentimental analysis of 100 interviews with ME individuals in Glasgow, Bradford, Manchester and Tower Hamlets for extracting vulnerabilities and assessing their intensities across different ME age groups, and a subsample of qualitative analysis of 21 interviews. This is to illustrate similarities and differences of sentimental analysis of these vulnerabilities between machine learning (ML) and inductive coding, offering an example for future ML supported qualitative data analysis approach in housing studies.
    Date: 2023–06–02
  36. By: Pier Luigi Parcu; Niccolo' Galli; Chiara Carozza
    Abstract: This article critically discusses several issues regarding the unfolding of the Metaverse concept. Through the analysis of several sources, it demonstrates the rise of the Metaverse myth, as well as the innovation activities that are ongoing regarding the development of the technologies involved and the actual financial evolution of those companies, or funds, that are related to the Metaverse. Finally, it investigates some of the business model innovations and those that are expected to emerge, while comparing the Metaverse with the present status of the Internet. The conclusions suggest possible lines of analysis for future research.
    Keywords: Metaverse, patents, business models, financing, technology
    Date: 2023–03
  37. By: Djankov, Simeon; Luksic, Igor; Zhang, Eva
    Abstract: We present suggestive evidence that new technology has reduced business regulation globally over the 2005-2019 period, in the areas of paying corporate taxes and starting a business. Lower-income countries and countries in the French civil law tradition have deregulated the most.
    JEL: O30 G38
    Date: 2022–02–25
  38. By: Bennett Schmanski; Chiara Scotti; Clara Vega
    Abstract: We estimate monetary policy surprises (sentiment) from the perspective of three different textual sources: direct central bank communication (FOMC statements and press conferences), news articles, and Twitter posts during FOMC announcement days. Textual sentiment across sources is highly correlated, but there are times when news and Twitter sentiment substantially disagree with the sentiment conveyed by the central bank. We find that sentiment estimated using news articles correlates better with daily U.S. Treasury yield changes than the sentiment extracted directly from Fed communication, and better predicts revisions in economic forecasts and FOMC decisions. Twitter sentiment is also useful, but slightly less so than news sentiment. These results suggest that news coverage and Tweets are not a simple echo chamber but they provide additional useful information. We use Sastry (2022)'s theoretical model to guide our empirical analysis and test three mechanisms that can explain what drives monetary policy surprises extracted from different sources: asymmetric information (central bank has better information than journalists and Tweeters), journalists (and Tweeters) have erroneous beliefs about the monetary policy rule, and the central bank and journalists (Tweeters) have different confidence in public information. Our empirical results suggest that the latter mechanism is the most likely mechanism.
    Keywords: Monetary policy; Public information; Price discovery
    JEL: C53 D83 E27 E37 E44 E47 E50 G10
    Date: 2023–05–26
  39. By: Simplice A. Asongu (Yaounde, Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This paper assesses the role of financial inclusion in moderating the incidence of entrepreneurship on energy poverty in Ghana. The assessment is made by using pooled data and two stage least squares. The exposition builds from the 7th (GLSS7) and 6th (GLSS6) rounds focusing on the Ghana Living Standards Survey (GSS, 2014, 2019) that is collected by the Ghana Statistical Service (GSS) from ten principal regions in the country. The findings show that entrepreneurship has an unconditional positive incidence on energy poverty while the interactive incidence between entrepreneurship and financial inclusion on energy poverty is negative. The corresponding financial inclusion policy thresholds that should be exceeded in order for financial inclusion to effectively moderate entrepreneurship for negative outcomes in energy poverty: (i) are between 0.154 and 0.280 index for the full sample; (ii) is between 0.187 index for the rural sub-sample; (iii) are between 0.200 and 0.333 index for the male sample. (iv) Thresholds are not computed for the rural and female sub-samples because at least one estimated coefficient that is needed for the computation of such thresholds is not significant. Policy implications are discussed. This study has complemented the existing literature by assessing how financial inclusion can be employed to influence the nexus between entrepreneurship and poverty in Ghana.
    Keywords: Energy poverty; Financial inclusion; Consumption poverty; Education; Household income
    JEL: D03 D12 D14 I32 Q41
    Date: 2023–01
  40. By: Pavlova, Elitsa; Gvetadze, Salome
    Abstract: This working paper examines the current academic literature on access to finance for female entrepreneurs and female-led enterprises. It covers two main financing markets: credit and venture capital (VC). The paper finds wide consensus in the academic field that gender-related credit and VC gaps exist in Europe. It also collects some of the most prominent empirical findings with respect to the gender imbalance in the European credit and VC markets during the last decade. This suggests an important role for gender-smart policy interventions at EU-level through the use of both equity and debt financing instruments.
    Keywords: Finance, Gender bias, small businesses
    Date: 2023

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.