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on Payment Systems and Financial Technology |
| By: | Sasho Arsov (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia); Aleksandar Naumoski (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia); Pece Nedanovski (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia) |
| Abstract: | The paper explores the issue of digital financial inclusion as a means to overcome the traditional hurdles in access to financial services and its impact on the level of financial development. Using a broad sample of 102 countries worldwide and a time series of data ranging from 2011 to 2021, a Principal Component Analysis is applied to derive a single measure of digital financial inclusion (DFI). The ranking shows that the developed countries and the European nations in general dominate the list, while the bottom is mostly populated by African countries. Using a modified digital financial inclusion index to meet the availability of data, a regression analysis using OLS and GMM techniques was applied to determine the impact of DFI on the level of financial development. The results show that digital financial inclusion has a positive impact on financial development, so the authorities should closely monitor and support the use of digital technologies in the financial sector, as well as enhance the access of the population to these opportunities and their ability to use modern communication technologies. |
| Keywords: | Financial development, Digital financial inclusion, Debit card, ATM |
| JEL: | G20 G50 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:aoh:conpro:2025:i:6:p:91-101 |
| By: | Claire Greene; Oz Shy; Joanna Stavins |
| Abstract: | This paper investigates the degree to which merchants influence consumers’ choice of how they pay for transactions. Using data from the Survey and Diary of Consumer Payments Choice, we examine consumers’ adherence to their preferred payment method when making in-person transactions. We also investigate whether merchants are able to steer consumers away from their preferred payment method. We characterize preferences for paying with cash or cards according to consumers’ income, level of education, and employment status. We find that consumers make most payments with their preferred method. When consumers pay with a non-preferred method, it is due only in small part to merchants’ refusal to accept that payment method. If a merchant accepts card payments, consumers who prefer paying with cards are not likely to pay with cash for large-value transactions or for gas or groceries. Discounts on cash purchases do not affect the probability of consumers deviating from using cards and paying with cash. Finally, the paper identifies “inertia” effects, which lead consumers to use the same payment method for consecutive purchases. |
| Keywords: | consumer payments; consumer payment choice; merchant steering; discounts; surcharges |
| JEL: | D14 E42 |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedbwp:102380 |
| By: | Xuesong Huang; Todd Keister |
| Abstract: | We study how the type of money used in blockchain-based trade affects interest rates, investment, and welfare. Stablecoins in our model are backed by safe assets, while banks issue deposits (both traditional and tokenized) to fund a portfolio of safe and risky assets. Deposit insurance creates a risk-shifting incentive for banks, and regulation increases banks’ costs. If regulatory costs are large and risk-shifting is limited, we show that allowing only tokenized deposits to be used in crypto trade raises welfare by expanding bank credit. If regulation is lighter and the risk-shifting incentive is strong, in contrast, allowing only stablecoins is desirable despite crowding out credit. In between these cases, allowing stablecoins and tokenized deposits to compete is optimal. The tradeoffs between these policies are reminiscent of both historical and recent debates over the desirability of narrow banking. |
| Keywords: | stablecoins; money creation; narrow banking; bank regulation |
| JEL: | E42 G21 G28 |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:102411 |
| By: | Douglas Cumming; Hisham Farag; Santosh Koirala; Danny McGowan |
| Abstract: | We study whether Fintech disrupts the banking sector by intensifying competition for scarce deposits funds and raising deposit rates. Using difference-in-difference estimation around the exogenous removal of marketplace platform investing restrictions by US states, we show the cost of deposits increase by approximately 11.5% within small financial institutions. However, these price changes are effective in preventing a drain of liquidity. Size and geographical diversification through branch networks can mitigate the effects of Fintech competition by sourcing deposits from less competitive markets. The findings highlight the unintended consequences of the growing Fintech sector on banks and offer policy insights for regulators and managers into the ongoing development and impact of technology on the banking sector. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.14071 |
| By: | Michael Junho Lee; Antoine Martin |
| Abstract: | Programmability is at the heart of ongoing work on the future of money and payments by central banks around the world. Despite its potential, there is growing concern that programmability conflicts with the provision of “good” money. This paper overviews key principles of “good” money and argues that the discourse on programmability inadequately differentiates between programmable money, which is generally negatively viewed, and programmable payments, which is generally accepted as part of the future. We provide a framework for programmable monetary systems that sharply distinguishes between programmable money and programmable payments. We show that our framework nests a broader set of financial arrangements and revisit the debate on programmability in the design of monetary systems. |
| Keywords: | digital money; programmability; payments; monetary systems |
| JEL: | E42 E58 G28 |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:102413 |
| By: | Vitaly M. Bord; Agnes Kovacs; Patrick Moran |
| Abstract: | Behind the scenes of every credit card lies an increasingly complex algorithmic infrastructure that determines who receives more credit and when, largely outside the inspection or knowledge of credit card users. Credit card issuers deploy sophisticated algorithms that continuously analyze consumer spending and borrowing behaviors, often increasing credit limits without consumers requesting such changes. |
| Date: | 2026–01–16 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:102363 |
| By: | Gersbach, Hans; van Buggenum, Hugo; Zelzner, Sebastian |
| Abstract: | Stablecoins are rapidly expanding as money-like assets for payments, trading, settlement, and cross-border transfer. In response, policymakers are moving quickly to develop new regulatory frameworks to safeguard the monetary and financial system. This article develops a forward-looking, research-based policy agenda for stablecoins, drawing on monetary theory, recent market developments (including stress events), our own analytical framework, and the broader academic literature. In our view, a world in which stablecoins reach scale requires a coherent package of measures: tools to preserve financial stability and resilience against liquidity crises; protections for monetary sovereignty and the singleness of money; rules on stablecoin remuneration; constraints on platform market power alongside interoperability requirements; robust financial-integrity rules; and international coordination to limit regulatory arbitrage and close cross-border loopholes such as multi-issuer structures. We also highlight several areas that require further evaluation prior to policy adoption, including whether (and under what conditions) a public liquidity backstop for systemic issuers or central-bank reserve access is warranted, as well as modernization pathways within the traditional monetary system. We benchmark our agenda against the U.S. GENIUS Act and the EU's MiCA and provide a cross-jurisdictional comparison. |
| Keywords: | Stablecoins, Private digital money, Regulation and policy, MiCA, GENIUS Act |
| JEL: | E4 E5 G1 G2 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cfswop:335903 |
| By: | Bianca He (University of Chicago); Lauren Mostrom (University of Chicago); Amir Sufi (University of Chicago – Booth School of Business and NBER) |
| Abstract: | Financial Technology (“FinTech†) firms invest significantly more in customer capital relative to traditional financial firms, and such investment builds valuable customer capital. Higher investment by FinTech firms is not accounted for by sectoral focus or differences in firm age. Reasons for higher customer capital investment are explored, including the need to build trust with customers, the focus on downstream segments of the financial marketplace, the operation of platform-based business models, and a heavier reliance on valuable customer data. |
| JEL: | G23 M3 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfi:wpaper:2026-14 |
| By: | Joseph Abadi (Federal Reserve Bank of Philadelphia); Jesús Fernández-Villaverde (University of Pennsylvania, NBER, and CEPR); Daniel Sanches (Federal Reserve Bank of Philadelphia) |
| Abstract: | We present a micro-founded monetary model of the world economy to study international currency competition. Our model features “unipolar” equilibria, with a single dominant international currency, and “multipolar” equilibria, in which multiple currencies circulate internationally. Long-run equilibria are highly history-dependent and tend towards the emergence of a dominant currency. Governments can compete to internationalize their currencies by offering attractive interest rates on their sovereign debt, but large economies have a natural advantage in ensuring the dominance of their currencies. We calibrate the model to assess the quantitative importance of these mechanisms and study the international monetary system’s dynamics under several counterfactual scenarios. |
| Keywords: | Dominant currency, international monetary system, strategic complementarities, history dependence |
| JEL: | E42 E58 G21 |
| Date: | 2026–01–28 |
| URL: | https://d.repec.org/n?u=RePEc:pen:papers:26-003 |
| By: | Rabeh Morrar (An-Najah National University); Fernando Rios-Avila (Levy Economics Institute of Bard College); Habib Hinn (Birzeit University) |
| Abstract: | This research investigates the factors contributing to the traditional and digital financial inclusion (FI) gender gap in Palestine and how it was shaped by the ramifications of the COVID-19 pandemic. Using secondary data from two nationwide FI surveys conducted in 2016 and 2022, the study employs an Oaxaca-Blinder decomposition and an intertemporal decomposition to analyze the changes in gender discrimination in financial literacy and access to financial services over time. Our results show a persistently high FI gender gap in 2016 and 2022. There is a worsening or unchanged FI gender gap in most aspects, including access to bank accounts, formal borrowing, and the adoption of digital financial services. Only the gender gap in access to private insurance decreased between 2016 and 2022, which is generally low in Palestine. The widening FI gender gap is driven by discrimination against women in economic participation (explained by changes in the coefficients gap), followed by changes in men's returns. The deterioration of women's socioeconomic conditions during the COVID-19 pandemic, particularly in terms of labor market participation, was the greatest contributor to the growth of intertemporal FI gender discrimination. Another contributor to the widening FI gender gap was the drop in income and employment during the pandemic, compounded by Israeli restrictions and rising political tension. Nonetheless, the gap narrows slightly over time among older individuals, indicating a positive trend for women’s FI across different age brackets. We find that household composition is pivotal in shaping the gender gap in FI, as the gap shrinks among households with a higher proportion of female members. Finally, adopting modern financial technologies may be slower among women facing barriers related to technology literacy or access to digital financial services; meanwhile, financial technology has a significant influence on the likelihood of FI, particularly favoring women. |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1734 |
| By: | Kenechukwu E. Anadu; Patrick E. McCabe; JP Perez-Sangimino; Nathan Swem |
| Abstract: | New money-like products, such as tokenized money market funds (MMFs), money market exchange-traded funds (MMETFs), and stablecoins, could be transformative for finance. These products may offer significant benefits, but like other money-like assets, they also have certain vulnerabilities. We introduce a framework to analyze the vulnerabilities of new products by comparing their features to those that contribute to vulnerabilities in MMFs. Specifically, we examine the extent to which each product engages in liquidity transformation, is subject to threshold effects, serves as a money-like asset, poses contagion risks, and has reactive investors. Our framework is useful for assessing the potential effects of novel cash-like products on the overall resilience of the financial system and how such an assessment may change as these products’ uses evolve. |
| Keywords: | Liquidity risk; Systemic risk; Shadow banking; Money market mutual funds; Financial stability |
| JEL: | E50 G10 G23 |
| Date: | 2026–01–06 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfe:102372 |
| By: | Jasna Tonovska (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia); Predrag Trpeski (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia) |
| Abstract: | Purpose Global capital increasingly flows not only through traditional financial markets and institutions, but through digital infrastructures—payment platforms, mobile banking systems, and online transaction networks that have become the new pipes of the global economy. These infrastructures shape how quickly capital enters, how securely it is intermediated, and how abruptly it can reverse. In this sense, digitalization is now part of the architecture of the global economy, conditioning the volatility that defines openness. Traditional analyses of the drivers of capital flows and their volatility, built around push factors (global shocks) and pull factors (domestic fundamentals), cannot fully explain why countries with similar fundamentals often face very different volatility profiles (Koepke, 2015; Cerutti et al., 2015; Fratzscher, 2011). As Carney (2019) noted, the pipes through which capital flows are transmitted matter as much as the drivers themselves. This study builds directly on that insight and provides a systematic empirical evidence that digital infrastructures act as pipes that shape the stability of global capital. Design/methodology/approach We extend the classical push–pull framework into a push–pull–pipes model (Pagliari et al., 2017; Wang, 2019). Push factors include a Global Financial Conditions Index (data sourced from Capital Economics), U.S. real GDP growth volatility (estimated volatility based on data sourced from FRED), and Global Economic Conditions volatility (estimated volatility based on data sourced from KOF Swiss Economic Institute). Pull factors comprise a Domestic Financial Conditions Index (data sourced from Capital Economics, Boraccia et al., 2023), a Financial Development Index (data sourced from the IMF), Capital Account Openness (Chinn–Ito index; Chinn et al., 2008), and Real Effective Exchange Rate volatility (estimated volatility based on data sourced from Bruegel). Pipes are measured by Relative Sovereign Credit Ratings (score versus the global median; De et al., 2020) and a Relative Digital Infrastructure Index (mobile and internet banking penetration per 1, 000 adults, benchmarked globally). σ_kt^ij= α_k^ij+β^ij 〖PUSH〗_t+γ^ij 〖PULL〗_(k, t-1)+δ^ij 〖PIPES〗_(k, t-1)+ε_kt^ij In this study, we explicitly embed digital infrastructures within the pipes dimension, thereby expanding the volatility debate beyond incentives to the channels through which capital is transmitted. Regarding the methodology, the analysis uses an unbalanced quarterly panel of advanced and emerging, and developing economies over 2000Q1–2023Q1. The dependent variable σ_kt^ij is the volatility of gross capital inflows, which is estimated as follows. For each economy and instrument (direct, portfolio, and other investment), we first estimate residuals from an ARIMA (1, 1, 0) model on the quarterly series; second, the standard deviation of these residuals is calculated as our volatility measure. The econometric specification employs panel fixed effects to control for unobserved country heterogeneity, with Driscoll–Kraay standard errors to address heteroskedasticity and autocorrelation. We estimate separate regressions for the drivers of volatility in FDI, portfolio, and other-investment inflows. We also run the specifications on the EMDE subsample to examine this group more closely. Findings Across the full sample, push factors dominate: global financial conditions and U.S. cycle volatility account for most of the variation in capital-flow volatility. Pull factors are uneven: stronger financial development and greater openness tend to attract flows but often raise volatility, while REER volatility remains a persistent destabilizer. Within this structure, pipe condition outcomes. Relative sovereign ratings are procyclical—upgrades attract inflows that are often more volatile—and digital infrastructures display a negative and statistically significant association with the volatility of total, portfolio, and especially banking-related inflows, suggesting that countries with deeper digital systems experience smoother financial intermediation and lower exposure to sudden stops. In EMDEs, however, the estimated coefficients on the Digital Infrastructure Index remain negative but largely insignificant, indicating that the stabilizing potential of digital pipes does not systematically materialize in weaker institutional environments. This pattern implies that while digitalization may facilitate access and speed of intermediation, it cannot by itself anchor stability without complementary institutional quality and regulatory depth. In such contexts, digital infrastructures operate more as accelerators of integration than as absorbers of volatility—enhancing financial connectivity but offering limited insulation from global shocks. Originality/value For EMDEs, investing in digital infrastructures should be viewed both as a development priority and as a conditional macro-financial resilience strategy. While digital systems can expand access and efficiency, their stabilizing potential remains largely unrealized in the absence of strong institutional and regulatory frameworks. Without these complements, digital infrastructures enhance financial connectivity but offer limited insulation from external shocks, operating more as channels of speed than of stability. Strengthening institutional quality and financial supervision is therefore essential for digital pipes to function as genuine macro-stabilizers. At the global level, integrating the “pipes” dimension—particularly digital infrastructures—into the IMF’s Integrated Policy Framework would acknowledge their role as structural complements to monetary, fiscal, and macroprudential instruments (Basu et al., 2023; IMF, 2023; IMF, 2022). Doing so would allow global surveillance and policy design to better capture how technological architectures condition the transmission and volatility of capital in an increasingly digitalized financial system (IMF, 2023). This study reconceptualizes the analysis of capital flow volatility for the digital era by extending the classical push–pull framework into a structural push–pull–pipes perspective. The evidence confirms that while global and domestic macro-financial conditions remain the primary determinants of volatility, the channels through which capital circulates increasingly matter (Reuter et al., 2025). Among these, digital infrastructures emerge as a new driver of capital flow volatility. Across all economies, deeper digital infrastructures are associated with lower volatility in total, portfolio, and banking inflows, reflecting smoother intermediation and improved informational efficiency. In EMDEs, however, the effect remains statistically weak, implying that digital systems alone cannot substitute for institutional strength. Their stabilizing potential is contingent on regulatory quality, supervisory depth, and the credibility of financial governance. Digital pipes are reshaping the speed, reach, and resilience of capital mobility. Recognizing their dual role—facilitating integration while conditioning volatility—should become central to future macro-financial frameworks. |
| Keywords: | Capital flows volatility, Drivers, Push, Pull, Pipes, Digital infrastructure |
| JEL: | F32 G15 O33 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:aoh:conpro:2025:i:6:p:308-312 |
| By: | Michael Junho Lee |
| Abstract: | Composability—open interactions between assets and protocols—facilitates a modular financial architecture. I document the emergence of composed asset transformation, where tokenized assets are re-bundled to alter access, liquidity, and risk characteristics to broaden and enhance the set of tokenized U.S. dollar instruments. Yet, I argue that “naive” composability fundamentally conflicts with the provision of pooled arrangements needed for liquidity provision, risk-sharing, and capital backstops. I demonstrate this in an economy consisting of a vertical chain of protocols. Upper-layer protocols expand access to users, but bootstrap contingent liquidity from lower-layer protocols, resulting in a waterfall of externalities. In equilibrium, the base protocol rations liquid reserves, resulting in systemic illiquidity across the economy. Under severe circumstances, total utilization shrinks with composability. I offer principles and direction for building a sustainable, composable system. |
| Keywords: | composability; tokenization; composed asset transformation; decentralized finance; protocol economy |
| JEL: | E42 G10 G20 D47 |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:102386 |
| By: | Irigoin, Alejandra |
| Abstract: | By specifying the specie on which returns were to be repaid respondentia was a ubiquitous financial instrument to carry international trade in which silver was “essential” for its continuation. Where multiple currencies existed and silver was the preferred money, imported silver species performed as foreign currency. Thus, the import of foreign coins created issues for prices, profits and exchange rates. Eighteenth century Europeans alternatively used respondentia or bills depending on the monetary context, casting a shade of doubt on the inherent efficiency of a cashless means of payment. Until the 1820s, private bills of exchange did not circulate where cash had a premium. Europeans developed means to regulate the price of foreign coins and exchange rates. Elsewhere respondentia allowed to hedge against exchange risk and propitiated arbitrage profits, giving an advantage over bills. The article documents the global scope of the instrument; it explains the exchange nature of the contract and explores the issues that respondentia came to solve. It highlights the role of monies of account Europeans used in pricing foreign currencies in international trade. |
| Keywords: | private maritime trade finance; early modern global commerce; exchange risk; monies of account |
| JEL: | N20 F31 G23 G14 |
| Date: | 2025–04–29 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:wpaper:128607 |
| By: | Hanan AbdelKhalik Abouelfarag (Damanhour University); Noha Nagi Elboghdadly (Faculty of Economic Studies and Political Science) |
| Abstract: | Financial inclusion is one of the key enablers of driving economic growth, alleviating poverty, and consequently achieving inclusive growth. Although the relationship between financial inclusion and economic growth has been widely investigated, its relationship with inclusive growth remains unexplored. This paper examines the causality between financial inclusion and inclusive growth in Egypt during the period 2004-2022. The novelty of this study resides in constructing two composite indices using a Principal Components Analysis (PCA). The first composite index is for financial inclusion, while the second is a new multidimensional index for inclusive growth. The results reveal that the Inclusive Growth Index experiences an upward trend over the study period while the Financial Inclusion Index starts to increase in 2018. The results of the Toda-Yamamoto Causality Test show a bidirectional causality between financial inclusion and three of the sub-indices of inclusive growth as well as the overall inclusive growth index. The empirical evidence highlights that financial inclusion efforts will not achieve their targeted outcome unless a simultaneous inclusive growth strategy is conducted. Moreover, improving governance indicators is crucial to promoting inclusive growth. |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1736 |
| By: | Zahid, Haider; Ali, Amjad; Audi, Marc |
| Abstract: | This study explores how cryptocurrency regulation influences corporate financial reporting across multiple jurisdictions from 2016 to 2022, examining how differing laws alter managerial incentives and assurance processes. Disclosure behaviour in strictly regulated and moderately regulated settings is compared with evidence from 20 firms operating in 10 countries. Ordinary least squares regression and thematic coding provide convergent evidence. OLS regression controls for jurisdictional grouping and sectoral variation are applied. The analysis finds that tougher regimes are associated with greater transparency, more consistent cryptocurrency valuation, and richer risk disclosure. These benefits are most pronounced where proactive regulators exercise strong public financial oversight. Conversely, firms operating under vague or lax regimes exhibit fragmented disclosure and limited comparability. The inquiry also highlights systemic shortcomings, including inconsistent accounting classification of cryptocurrency, the absence of a single impairment rule, and a lack of unified reporting norms. Such deficiencies hinder investors, regulators, and auditors in assessing financial positions and risk exposure. Stakeholder theory highlights accountability pressures, legitimacy theory explains symbolic responses, and systems theory situates disclosure within broader institutional ecosystems, showing how regulatory contexts shape organisational strategy and reporting conventions. The research concludes by urging international harmonisation of accounting standards and sector-specific disclosure guidance to secure transparency and comparability within the expanding digital asset economy. This implies that policymakers should prioritize regulatory clarity to improve global disclosure comparability. |
| Keywords: | Cryptocurrency Regulation, Financial Reporting, Disclosure Quality, FinTech |
| JEL: | G0 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127482 |
| By: | Satyajit Chatterjee; Burcu Eyigungor |
| Abstract: | Administrative data are used to establish patterns in contract terms, usage, and default rates of anonymized individual credit card accounts. The canonical heterogeneous-agent macro model is extended with a competitive credit card industry and ex-ante heterogeneity to explain these facts, including that the spread on card interest rates is several multiples of default rates. Some model implications of general interest are: (i) a 10 percent cap on credit card interest rates, as proposed in recent legislation, reduces credit limits for risky borrowers and is welfare reducing for them, and (ii) although most people are not liquidity constrained, the average model MPC is in the empirically relevant range because consistency with credit card facts implies people are impatient. |
| Keywords: | Credit limits; interest rate spreads; defaults; heterogeneity; MPC |
| JEL: | D15 E44 G51 |
| Date: | 2026–02–02 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedpwp:102381 |
| By: | McCann, Ewen; Giles, David |
| Keywords: | Agribusiness, Financial Economics |
| URL: | https://d.repec.org/n?u=RePEc:ags:canzdp:262891 |
| By: | Bakker, Gerben |
| Abstract: | We identify a previously underappreciated data revolution starting in the 1960s, in which business information firms adopted ICT very early on to automate market data sales. Before this ‘terminal revolution’, securities firms could barely cope with the paperwork of growing trading volumes, forcing the NYSE to close on Wednesdays to allow them to catch up. The terminal revolution placed computer screens on every client’s desk, changed how data was accessed and acted on, and created virtual trading floors, foreshadowing almost all stages the internet would go through some three decades later. We focus on early entrant Reuters and late entrant Bloomberg, which came to dominate global market data provision, discussing other firms along the way. We find that theory on sunk costs and market structure (Sutton, 1998) can explain how the exploding market remained highly concentrated, despite many new entrants. We also find that financial and business news (subject to Arrow’s paradox) was a complement to data (not subject to Arrow’s paradox), and barely profitable by itself: only firms offering both financial news and data tended to survive. |
| Keywords: | news agencies; financial and business news; business information; Arrow's fundamental paradox of information; trading data terminals; exchange rates; stock prices; bond prices; commodity prices; precursors to internet; industrialisation of services; ICT productivity impact; Kenneth J. Arrow; business history |
| JEL: | L82 L86 N20 N72 N74 N82 N84 O33 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:wpaper:129938 |
| By: | Hany Navarra (Saitama University, Saitama, Japan) |
| Abstract: | Remittances, the money migrant workers send to their origin country, are now a dominant external finance source for many developing countries, often surpassing official aid and foreign direct investment inflows. While widely recognized for supporting household consumption, their role in longterm poverty reduction remains contested. This study explores whether remittances only become developmentally effective under specific financial institutional conditions. Grounded in theories of absorptive capacity and institutional complementarity, it applies a dynamic panel threshold model to test whether financial system depth conditions the poverty-reducing impact of remittance inflows. Using panel data from 96 developing countries covering the period 2002 to 2021, the analysis identifies distinct regimes of remittance effectiveness. The findings offer a structural explanation for cross-country differences in remittance outcomes and provide new insight into how financial maturity shapes the developmental role of migrant transfers. Implications are drawn for SDGs related to poverty, financial access, and remittance cost reduction. |
| Keywords: | remittances, poverty, financial development, institutional threshold, SDGs, panel data |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:smo:raiswp:0562 |