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on Payment Systems and Financial Technology |
| By: | Claire Greene; Fumiko Hayashi; Alicia Lloro; Oz Shy; Joanna Stavins; Ying Lei Toh |
| Abstract: | US households that lack digital means of making and receiving payments cannot participate fully in an increasingly digitized economy. Assessing the scope of this problem and addressing it requires a definition of households that are underserved in digital payments. Traditional definitions of households underserved in the banking system—those that are unbanked and those that are underbanked—do not account for the ownership of nonbank transaction accounts that can be used to make and receive digital payments. In this paper, we define households underserved in digital payments by considering four key elements—access, use, safety, and affordability—and discuss how researchers may assess these elements to quantify the share of households underserved in digital payments. |
| Keywords: | digital payments; underserved; fintech; financial inclusion; nonbanks |
| JEL: | D12 D18 G21 G23 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbwp:98803 |
| By: | Aurazo, Jose; Gasmi, Farid |
| Abstract: | Digitization of retail payments has facilitated the promotion of financial inclusion recognized to stimulate growth, alleviate poverty, and address gender disparities in the financial sector. This paper closely examines four prominent payment solutions in the developing world, which are M-Pesa in Kenya, UPI in India, Pix in Brazil, and Yape in Peru. We employ a descriptive approach to identify the main factors that have contributed to the success of these digital payment systems, focusing on the role played by: i) private digital platforms developers and providers; ii) regulators and central banks and iii) the degree of the payment system interoperability. Although, to some extent, these varied experiences suggest that there is no one-size-fits-all solution, they highlight the necessity of active public-private sector cooperation and placing the end user at the center of such initiatives. |
| Keywords: | Digital payments; Financial inclusion; Interoperability; Regulation. |
| JEL: | G23 G28 L51 L96 O16 R11 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129719 |
| By: | Claire Greene; Fumiko Hayashi; Alicia Lloro; Oz Shy; Joanna Stavins; Ying Lei Toh |
| Abstract: | U.S. households that lack digital means of making and receiving payments cannot participate fully in an increasingly digitized economy. Assessing the scope of this problem and addressing it requires a definition of households that are underserved in digital payments. Traditional definitions of households underserved in the banking system—those that are unbanked and those that are underbanked—are not suitable because they do not account for the ownership of nonbank transaction accounts that can be used to make and receive digital payments. In this paper, we define households underserved in digital payments by considering four key elements—access, use, safety, and affordability—and discuss how researchers may assess these elements to quantify the share of households underserved in digital payments. |
| Keywords: | payment systems; digital currencies; fintech |
| JEL: | D12 D18 G21 G23 |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedkrw:98816 |
| By: | Uysal, Busye; Estrella, Ronny |
| Abstract: | While policymakers are beginning to address AI-generated content on social media, there remains a notable gap in regulatory approaches towards Virtual Influencers. The capability of Virtual Influencers to autonomously upload content presents significant challenges, especially in distinguishing between human and AI-generated content, which in turn affects user trust. To tackle this issue, this study proposes the implementation of disclosure flags specifically for content created by Virtual Influencers. This research involved a questionnaire administered to 189 Instagram users to explore how disclosure flags influence their perceptions and acceptance of Virtual Influencer's content. The findings reveal that although disclosure flags increase awareness, they do little to foster critical engagement with the content. The study emphasizes the importance of professional oversight and user-driven content moderation through disclosure flags to maintain the integrity of digital content. These insights are crucial for policymakers and platform designers working towards a transparent digital environment. The evident lack of transparency around Virtual Influencers highlights the urgent need for clearer regulatory frameworks. Therefore, this research advocates for comprehensive strategies that integrate these flags with broader educational and regulatory measures to enhance digital literacy and critical engagement among users. |
| Keywords: | Virtual Influencers, Social Robots, Social Media, Cognitive Dissonance, Affective Behavior, Disclosing Flags |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itsb24:302466 |
| By: | Pablo D. Azar; Adrian Casillas; Maryam Farboodi |
| Abstract: | This paper considers the “DeFi intermediation chain”—the market structure that underlies the creation and distribution of ETH, the native cryptocurrency of Ethereum—to examine how information asymmetry shapes intermediation rents. We argue that using proof-of-stake blockchain technology in DeFi leads to a novel limit to arbitrage, arising from the tension between arbitrageurs' privacy needs and blockchain transparency. Using a new dataset which distinguishes private and public transactions in Ethereum, we find that a 1% increase in private information advantage leads to a 1.4% increase in intermediaries' profit share. We develop a dynamic bargaining model that predicts information market power stems exclusively from participants' private information advantage. Our analysis illustrates how blockchain technology can sustain arbitrage opportunities despite low entry barriers. |
| JEL: | C83 D82 D86 G23 G29 L86 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32949 |
| By: | Goldbach, Stefan; Nitsch, Volker |
| Abstract: | This paper explores a monetary experiment, the adoption of Bitcoin as legal tender in El Salvador in 2021, to analyze the impact of digital currencies on international capital flows. Using a difference-in-differences approach, we find that, instead of making transfers easier, El Salvador’s official cross-border financial activity has decreased after the monetary change. This finding may reflect an increase in uncertainty. However, it is also in line with findings that link digital assets to illegal activity as previously officially recorded financial transfers may have been replaced by unrecorded activities. |
| Date: | 2024–09–05 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:149484 |
| By: | Di Wu |
| Abstract: | The year 2024 witnessed a major development in the cryptocurrency industry with the long-awaited approval of spot Bitcoin exchange-traded funds (ETFs). This innovation provides investors with a new, regulated path to gain exposure to Bitcoin through a familiar investment vehicle (Kumar et al., 2024). However, unlike traditional ETFs that directly hold underlying assets, Bitcoin ETFs rely on a creation and redemption process managed by authorized participants (APs). This unique structure introduces distinct characteristics in terms of premium/discount behavior compared to traditional ETFs. This paper investigates the premium and discount patterns observed in Bitcoin ETFs during first four-month period (January 11th, 2024, to May 17th, 2024). Our analysis reveals that these patterns differ significantly from those observed in traditional index ETFs, potentially exposing investors to additional risk factors. By identifying and analyzing these risk factors associated with Bitcoin ETF premiums/discounts, this paper aims to achieve two key objectives: Enhance market understanding: Equip and market and investors with a deeper comprehension of the unique liquidity risks inherent in Bitcoin ETFs. Provide a clearer risk management frameworks: Offer a clearer perspective on the risk-return profile of digital asset ETFs, specifically focusing on Bitcoin ETFs. Through a thorough analysis of premium/discount behavior and the underlying factors contributing to it, this paper strives to contribute valuable insights for investors navigating the evolving landscape of digital asset investments |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.00270 |
| By: | D’Annunzio, Anna; Russo, Antonio |
| Abstract: | We study transaction fees applied by marketplace platforms where sellers (e.g., app developers) adopt freemium pricing. An ad valorem transaction fee reduces quality distortions introduced by the price-discriminating seller, thereby increasing consumer surplus. Moreover, a small fee increases welfare, implying that the agency model may be socially preferable to integration between platform and seller. However, the platform may set the equilibrium fee above the socially optimal level. Providing devices needed to access the marketplace (e.g., phones) induces the platform to raise the fee, whereas providing a product that competes with the seller induces a lower fee. |
| JEL: | D4 D21 L11 H22 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129704 |
| By: | Lin William Cong; Pulak Ghosh; Jiasun Li; Qihong Ruan |
| Abstract: | Using proprietary data from the predominant cryptocurrency exchange in India together with the country's Household Inflation Expectations Survey, we document a significantly positive association between inflation expectations and individual cryptocurrency purchases. Higher inflation expectations are also associated with more new investors in cryptocurrencies. We investigate investment heterogeneity in multiple dimensions, and find the effect to be concentrated in Bitcoin (BTC) and Tether (USDT) trading. The results are robust after controlling for speculative demand captured by surveys of investors' expected cryptocurrency returns, and admit causal interpretations as confirmed using multiple instrumental variables. Our findings provide direct evidence that households already adopt cryptocurrencies for inflation hedging, which in turn rationalizes their high adoption in developing countries without a globally dominant currency. |
| JEL: | G0 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32945 |
| By: | Ackah, Charles; Hanley, Aoife; Hecker, Lars; Kodom, Michael |
| Abstract: | Our analysis of over 500 Ghanaian firms sheds light, for the first time, on how certain firms managed to extract value from mobile money. Our regressions point to the usefulness of this form of cashless payments in stabilizing sales during the COVID pandemic. Perhaps the most important message from our analysis is the recognition that the benefits from mobile money extend beyond its purpose as a tool for transacting cashless payments. We reveal that firms using these additional tools supported by MoMo (e.g. for planning or saving purposes) report higher sales resilience, all things equal. Our findings appear to echo the literature on private householders (e.g. Jack and Suri, 2014). However, while the latter report a positive effect due to remittances, our finding is more likely driven by enhanced ability of businesses to streamline their planning and sales. |
| Keywords: | Mobile Money, Africa, Firm, Urbanization |
| JEL: | G23 G21 L25 O14 O18 O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:kcgwps:303046 |
| By: | Auriol, Emmanuelle; Gonzalez Fanfalone, Alexia |
| Abstract: | This paper studies how Mobile Network Operator (MNO) impacts traditional banks’ coverage decision in a model of vertical and horizontal differentiation with asymmetric transportation costs. The competitive pressure triggered by MNOs entry on traditional banking sector leads to prices decrease and broadens financial inclusion as the traditional banking sector expands its network in response to the entry of MNOs. The model’s predictions are checked against data from Kenya, where mobile banking has been most successful. Results from the econometric model for the period 2000-2011, suggest that, roughly, for each 7 new mobile agents in a sub-locality, one new bank branch opened. |
| Keywords: | Financial inclusion; Regulation; Mobile banking; Development |
| JEL: | G18 L51 L88 L96 O16 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129721 |
| By: | Lambert, Claudia; Larkou, Chloe; Pancaro, Cosimo; Pellicani, Antonella; Sintonen, Meri |
| Abstract: | By applying a structural demand model to unique consumer-level survey data from the euro area, we assess how different CBDC design options, combined with individual (revealed) preferences, influence the potential demand for a digital euro. Estimating the demand for a digital euro, we find that if it were unconstrained, it could range, in steady state, between 3-28% of household liquid assets or €0.12 - €1.11 trillion, depending on whether consumers would perceive the digital euro to be more cash-like or deposit-like. With an illustrative €3, 000 holding limit per person, it could instead range between 2-9% or €0.10 -€0.38 trillion. Privacy, automatic funding, and instant settlement raise its potential demand. JEL Classification: E41, E50, E58 |
| Keywords: | Central bank digital currency, demand estimation, design attributes, structural model |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20242980 |
| By: | Adrian Casillas; Maryam Farboodi; Layla Hashemi; Maryam Saeedi; Steven Wilson |
| Abstract: | Over the past decade, social media platforms have emerged as prominent vehicles for displaying dissent. In response, various actors have increasingly spread fake news on these platforms to impair the opposition—the (dis)information war. We analyze a methodology to identify disinformation using network-based characteristics of the news initiators, and use data from Twitter (now X) to assess the effectiveness of this method in limiting the spread of disinformation. We find that it detects at least 85% of verified instances of disinformation without misidentifying any true news, and reduces both account engagement and lifespan of disinformation by at least a factor of two, highlighting the importance of swift discovery of disinformation to interrupt its exponential spread. |
| JEL: | A13 D72 L82 P0 Z13 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32896 |
| By: | Amado Morales, Laura G. (Universidad de los Andes) |
| Abstract: | During the Covid-19 pandemic, the Colombian government established the use of Digital Cash Transfers as a way to mitigate the impact of the economic crisis on the most poor and vulnerable of the Colombian population. Using data from Daviplata, one of the channels the government used to deliver the Digital Cash Transfers, I examine the effect that receiving these transfers had on financial deepening. My findings suggest that receiving a cash transfer via Daviplata increased financial deepening, through an increase in savings and an increase in the average number of transactions made by the user. However, this financial deepening did not translate into the access to a broader portfolio of financial products and services. Following an Difference-in-Differences Event Studies approach, I find that receiving a Digital Cash Transfer (DCT) had an effect on increasing savings in $24, 309, a quite large effect compared to average monthly savings for the targeted population. In terms of transactions, receiving a DCT via Daviplata had an effect of 0.1362, which represents an increase of about 20% compared to the number of average transactions made by the users. |
| Keywords: | Financial Inclusion; Financial Deepening; Cash Transfers; Digital Financial Institutions; Savings Behavior. |
| JEL: | G21 H53 I38 O16 |
| Date: | 2024–09–25 |
| URL: | https://d.repec.org/n?u=RePEc:col:000089:021195 |
| By: | Yu Zhang; Claudio Tessone |
| Abstract: | When analyzing Bitcoin users' balance distribution, we observed that it follows a log-normal pattern. Drawing parallels from the successful application of Gibrat's law of proportional growth in explaining city size and word frequency distributions, we tested whether the same principle could account for the log-normal distribution in Bitcoin balances. However, our calculations revealed that the exponent parameters in both the drift and variance terms deviate slightly from one. This suggests that Gibrat's proportional growth rule alone does not fully explain the log-normal distribution observed in Bitcoin users' balances. During our exploration, we discovered an intriguing phenomenon: Bitcoin users tend to fall into two distinct categories based on their behavior, which we refer to as ``poor" and ``wealthy" users. Poor users, who initially purchase only a small amount of Bitcoin, tend to buy more bitcoins first and then sell out all their holdings gradually over time. The certainty of selling all their coins is higher and higher with time. In contrast, wealthy users, who acquire a large amount of Bitcoin from the start, tend to sell off their holdings over time. The speed at which they sell their bitcoins is lower and lower over time and they will hold at least a small part of their initial holdings at last. Interestingly, the wealthier the user, the larger the proportion of their balance and the higher the certainty they tend to sell. This research provided an interesting perspective to explore bitcoin users' behaviors which may apply to other finance markets. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.10407 |
| By: | Jacob D. Leshno; Elaine Shi; Rafael Pass |
| Abstract: | Bitcoin demonstrated the possibility of a financial ledger that operates without the need for a trusted central authority. However, concerns persist regarding its security and considerable energy consumption. We assess the consensus protocols that underpin Bitcoin's functionality, questioning whether they can ensure economically meaningful security while maintaining a permissionless design that allows free entry of operators. We answer this affirmatively by constructing a protocol that guarantees economic security and preserves Bitcoin's permissionless design. This protocol's security does not depend on monetary payments to miners or immense electricity consumption, which our analysis suggests are ineffective. Our framework integrates economic theory with distributed systems theory, and highlights the role of the protocol's user community. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.08951 |
| By: | Simplice A. Asongu (Yaoundé, Cameroon); Therese E. Zogo (Yaoundé, Cameroon); Mariette C. N. Mete (Yaoundé, Cameroon); Barbara Deladem Mensah (Yaoundé, Cameroon) |
| Abstract: | The present study assesses the relevance of microfinance institutions (MFIs) in the effect of financial access on gender economic inclusion in 44 countries in Sub-Saharan Africa (SSA) for the period 2004 to 2018. The adopted empirical strategy is interactive quantile regressions that are tailored to account for both simultaneity and unobserved heterogeneity. Two MFIs dynamics are employed: MFIs per 1000km2 and MFIs per 100 000 adults. Financial access is measured in terms of female ownership of bank accounts while gender inclusion is in terms of reducing female unemployment. MFIs per 1000 km2 must reach thresholds of between 2.328 and 2.490 at the 90th quantile of the female unemployment distribution in order for female ownership of bank account to reduce female unemployment. The partial validity of the tested hypothesis is clarified and policy implications are discussed. |
| Keywords: | Africa; Microfinance; Gender; Inclusive development |
| JEL: | G20 I10 I32 O40 O55 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:agd:wpaper:24/036 |
| By: | OECD |
| Abstract: | This paper examines the recent evolution of competition in the financial services sector in Latin America and the Caribbean (LAC), focusing on the rise of Fintechs and the emergence of a pro-competitive regulatory framework. This evolution results from a symbiosis of positive feedback between technology and regulation, which reinforce and balance each other in shaping a new era for the sector in the LAC region. Over the last decade, the financial sector in LAC has undergone profound changes, including the entry of new players, the emergence of new products and the reconfiguration of market boundaries. These developments have led to competitive gains and the provision of better, more accessible, customised and inclusive financial services. Regulatory advances have played a crucial role at various stages of this process, sometimes laying the groundwork, sometimes welcoming and protecting new technologies and models driven by financial digitalisation, and more recently, even leading and fostering disruptive innovations. Open Banking currently stands as a key element of this shared agenda, both regionally and globally, aimed at deepening market transformation towards greater competition, innovation and inclusion. |
| Date: | 2024–09–27 |
| URL: | https://d.repec.org/n?u=RePEc:oec:dafaac:313-en |
| By: | Shuochen Bi; Yufan Lian; Ziyue Wang |
| Abstract: | In the financial field of the United States, the application of big data technology has become one of the important means for financial institutions to enhance competitiveness and reduce risks. The core objective of this article is to explore how to fully utilize big data technology to achieve complete integration of internal and external data of financial institutions, and create an efficient and reliable platform for big data collection, storage, and analysis. With the continuous expansion and innovation of financial business, traditional risk management models are no longer able to meet the increasingly complex market demands. This article adopts big data mining and real-time streaming data processing technology to monitor, analyze, and alert various business data. Through statistical analysis of historical data and precise mining of customer transaction behavior and relationships, potential risks can be more accurately identified and timely responses can be made. This article designs and implements a financial big data intelligent risk control platform. This platform not only achieves effective integration, storage, and analysis of internal and external data of financial institutions, but also intelligently displays customer characteristics and their related relationships, as well as intelligent supervision of various risk information |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.10331 |
| By: | Martin Peitz; Anton Sobolev |
| Abstract: | A seller can offer an experience good directly to consumers and indirectly through an intermediary. When selling indirectly, the intermediary provides recommendations based on the consumer’s match value and the prices at which the product is sold. The intermediary faces the trade-off between extracting rents from consumers who strongly care about the match value versus providing less informative recommendations but also serving consumers who do not. We analyze the allocative and welfare effects of prohibiting price parity clauses and/or regulating the intermediary’s recommender system. Prohibiting price parity clauses is always welfare decreasing in our model. |
| Keywords: | intermediation, digital platforms, price parity, recommender system, MFN clause, e-commerce |
| JEL: | L12 L15 D21 D42 M37 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_595 |
| By: | Asim Ghosh; Soumyajyoti Biswas; Bikas K. Chakrabarti |
| Abstract: | We study the fluctuations, particularly the inequality of fluctuations, in cryptocurrency prices over the last ten years. We calculate the inequality in the price fluctuations through different measures, such as the Gini and Kolkata indices, and also the $Q$ factor (given by the ratio between the highest value and the average value) of these fluctuations. We compare the results with the equivalent quantities in some of the more prominent national currencies and see that while the fluctuations (or inequalities in such fluctuations) for cryptocurrencies were initially significantly higher than national currencies, over time the fluctuation levels of cryptocurrencies tend towards the levels characteristic of national currencies. We also compare similar quantities for a few prominent stock prices. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.03676 |
| By: | Sylvain B. Ngassam (Dschang, Cameroon); Simplice A. Asongu (Johannesburg, South Africa); Gildas Tiwang Ngueuleweu (Dschang, Cameroon) |
| Abstract: | This research empirically analyzes the effect of social media on fragility. It goes beyond political grounds which oppose techno-optimistic to techno-pessimistic perceptions of the impact of social media to analyze its consequences on global, Security fragility, economic and social fragilities. The research uses annual data from a panel of 47 African countries for the period 2000–2018. Results reveal that the use of social media by the public to organize offline political actions has no outcome on global fragility. However, its use by elites for the same end accentuates global state fragility. This operates through Security and political fragilities. Fragility is negatively associated with higher civil society participation, education and democracy. The use of social media to organize offline political actions either by people or by elites in the context of higher civil society participation reduces fragility, while its use either by people or by elites in the context of higher educational level accentuates state fragility. The use of social media to organize offline political actions by people in the context of democracy boosts fragility but its use by elites in the same framework reduces fragility. There is a need to sensitize people, especially elites in Africa on the threats and opportunities of social media. There is also a necessity to develop a dynamic, well-educated and well-organized civil society and population in order to better valorize the opportunities that social media represents. |
| Keywords: | Social media, state fragility, security fragility, political fragility, economic fragility and social fragility |
| JEL: | G20 O38 O40 O55 P37 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:agd:wpaper:24/034 |
| By: | Jakree Koosakul; Ms. Longmei Zhang; Maryam Zia |
| Abstract: | After decades of increasing global economic integration, the world is facing a growing risk of geoeconomic fragmentation, with potentially far-reaching implications for the global economy and the international monetary system. Against this background, this paper studies how geopolitical proximity, along with other economic factors, affects the usage of five SDR currencies in cross-border transactions. Since World War II, the global currency landscape has remained relatively stable, with the U.S. dollar serving as the dominant currency. Using country-level SWIFT transaction data, our analysis confirms the importance of inertia, trade and financial linkages in shaping the currency landscape, consistent with existing studies. On geopolitical proximity, we find that closer proximity can boost the use of the euro and renminbi, notably among emerging market and developing economies, although the impact is rather muted in the full sample. The effect on RMB usage in the full sample is more pronounced during periods of heightened trade policy uncertainty. These findings suggest that in a more geoeconomically fragmented world, alternative currencies could play a greater role. |
| Date: | 2024–09–06 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/189 |
| By: | Tehrani, Radin; Ramezanian, Hasan |
| Abstract: | Consumer purchases are largely shaped by their assessment of a product's benefits, drawbacks, and emotional aspects. Psychological and marketing research suggests that emotions influence customers at various points in the buying process. This research seeks to identify the factors that may affect consumer emotions when buying luxury cosmetics. To examine the different facets of customer emotions, a qualitative study was carried out through in-depth semi-structured interviews with 23 users of high-end cosmetics and health products in Telegram groups. This study revealed various emotional dimensions and identified factors that trigger emotions in the target market. The subsequent phase involved determining the variables that influence customer emotions, based on collective agreement. This phase included a panel of 15 experts in marketing, psychology, luxury cosmetics import businesses on digital platforms, and managers of online luxury cosmetics and hygiene groups. Using a three-step consensus approach, the experts identified and evaluated 36 factors influencing customer emotions based on their importance and perceived impact. These factors were then grouped into three categories: personal variables, group and product variables, and contextual variables. |
| Date: | 2024–09–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:pwv2r |
| By: | Pisarkiewicz, Anna Renata; Parcu, Pier Luigi |
| Abstract: | The digital economy, which keeps transforming how people and businesses interact and operate, has certain distinctive characteristics that pose unique challenges for regulators. It is highly dynamic and driven by innovation, which in comparison to the past, happens at a much faster pace and is more disruptive. It is technology-based and, more than before, data-driven, which means that it requires notable ICT and analytic capabilities and the ability to interpret and make decisions based on vast amounts of data. For example, to understand the economies of scale in search and the value of targeted advertising, the UK CMA requested and analysed over 4TB of data from Google and Bing during its market study on digital advertising (Hunt, 2022). Moreover, the digital economy with its corresponding digital regulations is increasingly complex and interconnected, making it difficult for regulators to understand and coherently regulate specific problems or components without examining entire digital and regulatory ecosystems. The digital economy also transcends traditional sectoral silos as well as territorial and jurisdictional limitations, thereby presenting challenges in terms of ensuring harmonized regulatory frameworks and effective compliance across different national authorities and different geographical realities. The German Facebook (Meta) case and the subsequent preliminary ruling from the EU perfectly illustrate both the increasingly blurred lines between data protection and competition law enforcement as well as a need for coordination and collaboration between the respective regulators. Finally, the global and interconnected nature of the digital economy creates important dependencies and vulnerabilities that regulators must understand and navigate, which exposes regulation to geopolitical tensions. The interplay between merger control and foreign direct investment (FDI) screening, for example, in cases involving semiconductors shows how regulatory frameworks must adapt to address these dependencies and vulnerabilities, ensuring that economic considerations are balanced with national security interests amidst rising geopolitical tensions. |
| Keywords: | Regulatory agility, digital markets, enforcement, VUCA framework, collaborative regulation, technological gap, technological proficiency, innovative policymaking, competences |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itsb24:302491 |
| By: | Shu Takahashi; Kento Yamamoto; Shumpei Kobayashi; Ryoma Kondo; Ryohei Hisano |
| Abstract: | The prediction of both the existence and weight of network links at future time points is essential as complex networks evolve over time. Traditional methods, such as vector autoregression and factor models, have been applied to small, dense networks, but become computationally impractical for large-scale, sparse, and complex networks. Some machine learning models address dynamic link prediction, but few address the simultaneous prediction of both link presence and weight. Therefore, we introduce a novel model that dynamically predicts link presence and weight by dividing the task into two sub-tasks: predicting remittance ratios and forecasting the total remittance volume. We use a self-attention mechanism that combines temporal-topological neighborhood features to predict remittance ratios and use a separate model to forecast the total remittance volume. We achieve the final prediction by multiplying the outputs of these models. We validated our approach using two real-world datasets: a cryptocurrency network and bank transfer network. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.08718 |
| By: | Lee, Changjun |
| Abstract: | This study delves into the contemporary phenomenon of the convergence of digital technology and the service industry, aiming to provide a profound analysis and propose future-oriented directions for industrial development. It seeks to offer academic insights and practical guidelines through this exploration. The necessity of the research stems from the significant impact of digital technology in today's society, which is reshaping traditional service industry landscapes and prompting innovations in service delivery. Understanding these technological shifts is crucial for formulating effective industrial strategies and policies. This era of Digital Transformation (DT) reflects a transition from vertically integrated firms to disaggregated supply chains, highlighting the evolution of business competition into a fusion on digital platforms. The research aims to develop a new analytical framework to view the digital transformation process in the service industry, thereby innovating research and practical approaches in this field. A focus on innovative startups driving digital transformation is employed, with in-depth analyses using topic modeling and network analysis to understand their impact on the service industry. The study also investigates the fusion and trends within the service industry, utilizing topic modeling to examine classification methods and analyze the convergence trends of technology and business models (BM). Furthermore, the research aims to clarify the employment impacts within the digital transformation ecosystem. By analyzing factors influencing employment changes, it intends to provide insights into future employment trends and policy directions, preparing for the forthcoming era of advancements like artificial intelligence. This comprehensive approach not only aims to understand the current changes systematically but also to prepare for the rapidly evolving digital era's demands on the service industry. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itsb24:302458 |
| By: | Garcia-Murillo, Martha; MacInnes, Ian |
| Abstract: | The rapid evolution of information technologies has led to a society with worldwide connectivity, efficiency, and convenience. Yet these technological innovations are not free of perils, as they can also negatively impact our economic, political, and social well-being. This paper analyzes the tradeoffs between technological progress and its potential harms, particularly in the United States. Recognizing the historical benefits of digital technologies while also being mindful of their negative consequences, we highlight the complex market dynamics, political influences, and societal forces that determine whether policymakers can pass legislation and regulatory measures to mitigate the potential harm caused by disruptive innovations. The research question driving this paper is: How do market dynamics, political influences, and societal forces interact to shape the prospects of introducing effective legislation and regulatory measures for digital technologies in the United States? In the absence of legal frameworks, what alternative entities are there to mitigate a technology's negative impacts? The research methodology entailed a comprehensive analysis of the scholarly literature and a review of secondary sources related to digital technologies. Synthesizing insights from academic works, reports, and studies, this paper analyzes the multifaceted forces influencing the introduction of legislation and regulatory frameworks for digital technologies in the United States. |
| Keywords: | Digital regulation, social media, digital markets, algorithms, artificial intelligence |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itsb24:302468 |
| By: | Ozili, Peterson K |
| Abstract: | The finternet is an emerging concept in global finance. The finternet is a term used to describe financial systems that are interconnected to one another like the internet. The finternet is a vision of the financial system of the future and Africa cannot be left behind in the race to transition to the finternet. But for this to happen, there is a need to understand what the finternet really is, what it means for Africa, the benefit for African countries, the mechanisms that exist today that will bring Africa closer to the finternet and the changes that need to be made today to prepare African countries for the finternet. This article explores the concept of the finternet, its definitions, benefits, and the strategies to help African countries transition to the financial system of the future which is the finternet. |
| Keywords: | finternet, financial system, financial services, interconnectedness, Africa, African countries, internet |
| JEL: | G21 G22 G23 G24 O31 O33 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122166 |
| By: | Restrepo, Brandon J.; Zeballos, Eliana |
| Abstract: | A notable shift toward online grocery shopping is occurring. To examine the prevalence and frequency of online grocery shopping, the methods of receiving groceries purchased online, and the primary motivators prompting U.S. consumers to buy groceries online, this report uses nationally representative data from the USDA, Economic Research Service’s 2022 Eating and Health Module of the American Time Use Survey. The analysis reveals that about one in five individuals who usually do any grocery shopping in their household purchased groceries online at least once in the past month. Shoppers more likely to buy groceries online than their counterparts and who shopped online more frequently were female, ages 15–24, non-Hispanic White, married or partnered, from a household with young children, more educated, income ineligible for SNAP benefits, or frequently did the grocery shopping in their households. Pickup and delivery options were chosen almost equally, and more than two in five online grocery shoppers cited time constraints as the main reason the shoppers chose to buy groceries online. Examining the drivers of online grocery shopping can inform program, policy, and retailer decision making—given the potential for online grocery shopping to improve food access, foster healthier purchases, and alter the food retail landscape. |
| Keywords: | Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics, Research Methods/ Statistical Methods |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ags:uersrr:346028 |
| By: | Bouvard, Matthieu; Casamatta, Catherine |
| Abstract: | We study agents that provide Cash-In/Cash-Out (CICO) services to mobile money consumers. A moral hazard friction constrains these agents’ ability to hold liquid reserves, which creates an endogenous cost for operators of ensuring reliable CICO services. Interoperability that allows agents to contract with multiple operators tends to decrease the amount of liquidity held by agents when the moral hazard problem is mild through a higher utilization rate but can increase it when the moral hazard problem is severe. In the latter case, the fees paid by operators to agents become strategic complements sustaining multiple equilibria with different levels of liquidity. Fees from operators to agents tend to be inefficiently low from a welfare perspective, both because operators internalize agents’ agency rents as a cost and because they do not internalize that higher fees, by expanding agents’ capacity to hold liquidity, benefit consumers from other operators. In that context, authorizing interoperability can decrease (when moral hazard is mild) or increase (when moral hazard is severe) welfare. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:129703 |
| By: | Simplice A. Asongu (Johannesburg, South Africa); Joseph Nnanna (Abuja, Nigeria) |
| Abstract: | This research investigates how enhancing remittances affects total factor productivity (TFP) dynamics in Sub-Saharan Africa. The Generalised Method of Moments (GMM) empirical strategy is adopted for the purpose of the study and the engaged TFP dynamics are: TFP, real TFP, welfare TFP and real welfare TFP. Significant net effects are not apparent from enhancing remittances for TFP, real TFP growth and welfare TFP while positive net effects are apparent on real welfare TFP. The unexpected findings are elucidated and policy implications are discussed. This study has complemented the attendant literature by assessing how growing remittances influence dynamics of TFP in Sub-Saharan Africa. |
| Keywords: | Economic Output; Remitances; Sub-Saharan Africa |
| JEL: | E23 F24 F30 O16 O55 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:agd:wpaper:24/021 |
| By: | Hikaru Ogawa (Faculty of Economcis, The University of Tokyo); Ryota Tsuchiya (Graduate School of Economcis, The University of Tokyo) |
| Abstract: | This study examines the effect of international taxation rules that allow market countries to tax the sales of a giant digital IT firm based outside the countries. It develops an asymmetric tax competition model where one country hosts an online service supplier selling digital services over the Internet worldwide. The main finding indicates that changes in tax rules improving market countries will not only benefit them but also the country hosting the global supplier whose tax bases would shrink. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:tky:fseres:2024cf1235 |
| By: | Julien Gosse |
| Abstract: | This thesis investigates the strategic digital transformation of organizations in the broader context of sustainability imperatives. Concretely, it focuses on the following questions: How are digital technologies such as platforms, artificial intelligence, and Internet of Things adopted today? What are the managerial complements needed to derive sustainable value from such technologies, and how are those adopted themselves? Finally, how do digital transformation and sustainability intersect with each other and how can organizations strategically integrate both? Relying on quantitative and qualitative data, this thesis brings empirical and theoretical contributions to both practice and research. Regarding the empirical findings, it documents the adoption of digital technologies and managerial practices, identifying the determinants of their profusion and highlighting, for example, the role played by firms’ size. Furthermore, it shows heterogeneity in the joint presence of digital technologies and specific managerial practices, notably those related to environmental innovation. Building upon these empirical findings and conceptual efforts, this thesis also presents theoretical propositions on the interlinkage between digital transformation, corporate strategy and sustainability. Concretely, it advances organizational and managerial complements needed to derive value from digital technologies today and also suggests an heterogeneous role of such technologies in sustainability transformation. |
| Keywords: | Strategic Management; Digital transformation; Digitalization; Sustainability; Environmental Management |
| Date: | 2024–09–18 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/376968 |
| By: | Álvaro González; Carmen López; María José Meléndez |
| Abstract: | This document measures the importance of each bank in the payment system network administrated the Central Bank of Chile (Sistema LBTR), using two indicators of network analysis. The indicators are based on the liquidity and contagion risk concentrated in each participant. During the 10 years of the sample (2012-2022), the importance of each participant has changed, highlighting the evolution of merged banks and some smaller ones. In terms of liquidity provision, there are important participants of the network that are not systemic based on alternative metrics, such as size of total assets. Finally, the document concludes that the 2022 payment network is more resilient than 2012 to individual liquidity shocks, since both indicators decrease their concentration, spreading among more participants. This document contributes to the monitoring of the risks present in the local RTGS system, presenting a methodology to calculate the degree of importance of each participant of the payment network. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:chb:bcchwp:1021 |
| By: | Heidebrecht, Sebastian |
| Abstract: | Digitalisation has developed into a central political issue of the 21st century. The European Union is championing its distinctive “human-centric” model for the digital sphere amid growing concerns about disinformation, surveillance and excessive market power. Facing external challenges and perceived lagging in the digital economy has created a need to promote digitalisation in the EU, leading to policy changes and a redefined approach to internet governance. It has also led to institutional changes within the EU. To address the challenges of the digital economy, the EU adopted several legislative packages that ultimately changed the role of the Commission and gradually empowered a central executive. However, it is one thing to have more powers and another to use them responsibly. Therefore, more public intervention powers may require greater democratic control. |
| Date: | 2024–09–12 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:kwrzg |
| By: | Bruno Lefevre; Louis Wiart |
| Abstract: | Alibaba and Amazon now dominate global e-commerce. Although their strategies partly differ, they are both territorializing their activities around sorting hubs and warehouses. This often creates tensions in local territories. In our research exploring the effects of these strategies, conducted in France and Belgium from 2019 to 2022, we hypothesized that the impacts of the digital industrialization of local and global trade go beyond sales and logistics; the concentration of these markets in the hands of two ultra-dominant actors reflects unequal power relations that are reconfiguring governance, public decision-making, and democracy, notably by obscuring the major challenges that territories face. |
| Keywords: | Economie créative; Alibaba; Amazon; E-commerce; Commerce électronique; Territoire; Gouvernance |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/378019 |
| By: | Maarten van Rooij; Rob Alessie; Annamaria Lusardi |
| Abstract: | This paper surveys what we have learned on financial literacy and its relation to financial behavior from data collected in the Dutch Central Bank (DNB) Household Survey, a project done in collaboration with academics. A pioneering survey fielded in 2005 included an extensive set of financial literacy questions and questions that can serve as instruments for financial literacy in regression analyses to assess the causal effect of financial literacy on behavior. We describe how this survey spurred a series of research papers demonstrating the crucial role of financial literacy in stock market participation, retirement planning, and wealth accumulation. This inspired various follow-up studies and experiments based on new data collections in the DNB Household Survey. Researchers worldwide have used these data for innovative studies, and other surveys have included similar questions. This case study exemplifies the essential role of data in empirical research, showing how innovative data collections can inspire new research initiatives and significantly contribute to our understanding of household financial decisionmaking. |
| Keywords: | financial literacy; consumer financial decision-making; household finance; survey methodology; data collection methods; empirical analysis; |
| JEL: | G53 D14 D12 C81 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:dnb:dnbwpp:815 |
| By: | Yifan Jia; Yanbin Wang; Jianguo Sun; Yiwei Liu; Zhang Sheng; Ye Tian |
| Abstract: | Ethereum faces growing fraud threats. Current fraud detection methods, whether employing graph neural networks or sequence models, fail to consider the semantic information and similarity patterns within transactions. Moreover, these approaches do not leverage the potential synergistic benefits of combining both types of models. To address these challenges, we propose TLMG4Eth that combines a transaction language model with graph-based methods to capture semantic, similarity, and structural features of transaction data in Ethereum. We first propose a transaction language model that converts numerical transaction data into meaningful transaction sentences, enabling the model to learn explicit transaction semantics. Then, we propose a transaction attribute similarity graph to learn transaction similarity information, enabling us to capture intuitive insights into transaction anomalies. Additionally, we construct an account interaction graph to capture the structural information of the account transaction network. We employ a deep multi-head attention network to fuse transaction semantic and similarity embeddings, and ultimately propose a joint training approach for the multi-head attention network and the account interaction graph to obtain the synergistic benefits of both. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.07494 |
| By: | Jiao, Yang (Singapore Management University); Kwon, Ohyun (Drexel University); Lee, Saiah (Ulsan National Institute of Science & Technology) |
| Abstract: | We investigate the internationalization of Renminbi (IoR) since 2006 by examining its increased utilization among Korean exporters to China. Employing proprietary data fromKorean customs, which includes detailed invoicing information, our analysis reveals that products invoiced, either fully or partially, in RMB have experienced more rapid export growth. Furthermore, firms adopting RMB invoicing also exhibit faster export growth to China after controlling for relevant observables. Our findings remain robust when employing an instrumental variable approach to address potential endogeneity concerns. With the help of a currency invoicing model that demonstrates different impact channels, we show that the increased trade volume is due to Chinese importers facing lower currency costs when purchasing RMB-invoiced products compared to USD-invoiced products. |
| Keywords: | RMB internalization; invoicing currency; international trade |
| JEL: | D22 F14 F31 |
| Date: | 2024–09–06 |
| URL: | https://d.repec.org/n?u=RePEc:ris:drxlwp:2024_013 |
| By: | Hernández de Rojas, Félix; Pita, Pilar Rodríguez; Pérez Martínez, Jorge Emiliano |
| Abstract: | Lately, we have seen a growing concern for competitiveness, strategic autonomy, and the rising of digital divide in the European Digital Single Market. To tackle these issues, in 2023 the EU1 set forth the Digital Decade program that "empowers businesses and people in a human-centred, sustainable and more prosperous digital future"2, with the aim of attracting investment and creating an innovative and digital ecosystem "made in Europe". However, Europe faces a set of barriers that arise from the cultural, linguistic, and societal differences that exist between the Member States and that do not exist in other largely populated countries in Asia or America. Throughout our research, we have clustered the 240 NUTS2 regions of the EU by their digitalisation, based on the Digital Economy and Society Index, and their competitiviness, based on the EU Regional Competitiviness Index, and their respective variables. we have made use of the Moran's I and Geary's C that allows us to determine the degree of clustering of EU regions and giving us a hint on which regions are more susceptible to "digital contagion", and which regions are most likely of be left behind because of lack of this phenomena. Our research identifies the above aspects and analyzes them within the heterogeneity of digitalization situations in the regions, identifying those where this "digital contagion" or "spatial spillover" works satisfactorily and where it does not, as well as considering whether national or EU policies are relevant to this end. |
| Keywords: | Digital Contagion, Spatial Autocorrelation, NUTS2, European Union, Competitivity |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itsb24:302495 |