Innovative Financial Products Research Articles

Operations strategy for supply chain finance with asset-backed securitization: Centralization and blockchain adoption

Supply chain finance (SCF) is a set of financing processes and technology-based business that links supply chain members, in which innovative financial products and technologies, i.e., asset-backed securitization (ABS) and blockchain, have been widely adopted. We use a game-theoretic approach to study the operations strategy for SCF with ABS. More precisely, we explore the issue of centralization, that is, whether a retailer, as a core company in a decentralized supply chain system, should establish her own originated channel, and the impacts of the blockchain adoption on supply chain systems. We find that the core company should not establish her own originated channel when her main business is to sell high-cost products or when the marginal cost of blockchain implementation is sufficiently large. Besides, when the core company builds her own originated channel, the manufacturer should decrease the wholesale price, but the core company should increase the retail price under certain conditions. Interestingly, both the service rate and interest rate in the financing channel remain unchanged. In addition, we find that the impacts of the blockchain technology on the wholesale price, retail price, and discount of the fund depend on the production cost. However, both the service rate and interest rate always decline when the blockchain technology is introduced, because the market becomes more creditable. Moreover, in both decentralized and centralized systems, all supply chain members’ profits are increased if the marginal cost of the blockchain technology is sufficiently low.

Analysis of innovative technologies and identification of new information tools for effective activities of enterprises on the example of the financial market of Ukraine

The object of research is modern innovative information technologies as a factor in market transformation. The subject of research is the theoretical and methodological foundations of the use of financial technologies in the financial sector of the economy. One of the important problems for the world financial market today is to increase the efficiency of its functioning through the introduction of modern management methods based on innovative information technologies. The most problematic areas is the use of proprietary software. The importance of the latter factor is increasing every year due to the strengthening of legislative requirements and pressure from rightholders. That is why it is advisable to offer the Blueshift platform, which will help expand the capabilities and functions of financial and economic activities. The study used methods of collecting, processing and interpreting information about innovative financial products, and theoretical generalization, analysis of definitions, comparative analysis, concretization and systematization of modern financial technologies, observation and visual presentation of the analysis results. The main hypothesis of the study is the assumption that the use of modern innovative information platforms will allow active users to increase the efficiency of making ready-made decisions when solving problems arising in the financial sector of the economy. It is impossible to confirm this hypothesis without a detailed analysis of financial technologies, as well as innovations associated with modern open source systems, which allow market participants to reduce costs and maximize the likelihood of data protection. In paper, it was proposed to use the Blueshift platform for research and implementation of systematic investment strategies based on its built-in capabilities. The advantages and disadvantages of using the Blueshift platform as a «platform as a service» are analyzed. Thanks to this innovation, such advantages in functionality as information security, ease of adaptation, and economic benefits can be obtained.

PERANAN BMT AR-RAHMAH TERHADAP PENGEMBANGAN EKONOMI UMMAT DI KECAMATAN PANCA RIJANG KABUPATEN SIDENRENG RAPPANG

In this research, there are two main problems, namely: the service pattern of BMT Ar-Rahmah Rappang as the quality of the community's economic improvement and the level of economic change concerning Rappang in the financing of BMT Ar-Rahmah to assess the point of satisfaction of its customers. This research describes the pattern or form of service implemented by BMT Ar-Rahmah Rappang with the quality of improvement and economic change in the ummah; its purpose is to assess the point of customer satisfaction. In data collection, used library research methods and field research using interview observation techniques and documentation. The collected data were processed using the descriptive and inductive methods. The results showed that BMT Ar-Rahmah Rappang is a sharia microeconomic financial business institution that is trusted by the public. In an effort to maintain and maintain its existence in such a tight competition, BMT always tries to carry out its service functions properly through professional service patterns and Islamic ethics, with various forms of services including the provision of facilities and infrastructure, innovative financial products, and employee performance. So that customers are always satisfied, and its existence as an institution for economic empowerment of the people, especially the middle to the lower class, so that it grows and develops.

PERANAN BMT AR-RAHMAH TERHADAP PENGEMBANGAN EKONOMI UMMAT DI KECAMATAN PANCA RIJANG KABUPATEN SIDENRENG RAPPANG

In this research, there are two main problems, namely: the service pattern of BMT Ar-Rahmah Rappang as the quality of the community's economic improvement and the level of economic change concerning Rappang in the financing of BMT Ar-Rahmah to assess the point of satisfaction of its customers. This research describes the pattern or form of service implemented by BMT Ar-Rahmah Rappang with the quality of improvement and economic change in the ummah; its purpose is to assess the point of customer satisfaction. In data collection, used library research methods and field research using interview observation techniques and documentation. The collected data were processed using the descriptive and inductive methods. The results showed that BMT Ar-Rahmah Rappang is a sharia microeconomic financial business institution that is trusted by the public. In an effort to maintain and maintain its existence in such a tight competition, BMT always tries to carry out its service functions properly through professional service patterns and Islamic ethics, with various forms of services including the provision of facilities and infrastructure, innovative financial products, and employee performance. So that customers are always satisfied, and its existence as an institution for economic empowerment of the people, especially the middle to the lower class, so that it grows and develops.

Analysis of Financing Risk and Innovation Motivation Mechanism of Financial Service Industry Based on Internet of Things

It is of practical significance to introduce the Internet of Things technology into the financial service industry and find the driving factors and mechanisms of financial innovation to accelerate the promotion of financial innovation. This article starts from the perspective of banks and other supply chain financial institutions, takes mainstream trading products in the commodity trading market as the research object, uses the LA-VAR model, and fully considers the market price fluctuations and liquidity factors of supply chain financial inventory products. It analyzes the theoretical basis of the continuous innovation of rural financial products. On the basis of analyzing the basic characteristics and types of rural financial product innovation, we explore the connotation of sustainable innovation of rural financial products, clarify the evaluation criteria, and lay a theoretical foundation for continuous dynamic evaluation. Based on technical innovation evaluation theoretical models such as Schumpeter’s innovation model, technical specifications-technological track model, and NR relationship model market, we analyze the innovation elements of rural financial products from the external and internal aspects of innovation and discuss the relationship between the factors. The interaction mechanism of rural financial products has established a dynamic mechanism model for the continuous innovation of rural financial products. A fuzzy comprehensive evaluation was made on the continuous innovation power of financial service industry products in a certain area. Using a combination of remote surveys and on-site visits, a questionnaire survey was conducted on financial service industry institutions in a certain region’s financial system. Each survey object was required to conduct 120 × 1067 index comparisons and use the data after processing the arithmetic average Matlab carries out the objective processing of programming. The results show that the LA-VAR model with liquidity indicators can measure the liquidity risk well and more comprehensively evaluate the risk of the inventory pledge financing model. According to the index weights determined by AHP, the development of the financial service industry will be promoted in a targeted manner from the internal construction of financial institutions and the optimization of the external innovation environment.

Does poverty-alleviation-based industry development improve farmers’ livelihood capital?

Targeted poverty alleviation is a unique approach adopted in China to help achieve the vision of a moderately prosperous society in all aspects and the “Chinese Dream”. Industrial development as a means of poverty alleviation is an integral part of the “Five-pronged Poverty Alleviation Measures” Project of targeted poverty alleviation, and a critical foundation for other poverty alleviation measures. In this study, a comprehensive evaluation method was used to measure farmers’ livelihood based on the framework of sustainable livelihood. Specifically, the effects of industrial development on farmers’ livelihood capital were estimated by employing the propensity score matching combined with the difference-in-differences (PSM-DID) approach. Findings suggest that industrial development had a significantly positive effect on the livelihood capital of farmers. Industrial development can significantly enhance farmers’ human, social and financial capital, while it cannot significantly affect the natural and physical capital. Industrial development had heterogeneous effects on farmers’ livelihood capital, more efficiently impacting on the non-poor than the poor. The effects on farmers’ livelihood capital varied across regions, with Guizhou experiencing a larger effect than Sichuan. However, the effect was insignificant for farmers in Gansu. To improve farmers’ livelihood capital, it is necessary to take measures to strengthen their human capital, promote the innovation of financial products, and make good use of their social capital; it is also essential to strengthen the support of industrial development to the poor.

Reshaping financial systems: The role of ICT in the diffusion of financial innovations – Recent evidence from European countries

Exchange-traded funds (ETFs) are among the fastest-growing types of innovative financial products. The emergence and spread of these instruments have been facilitated by the digital revolution. Information and communication technology (ICT) is profoundly reshaping the global economic landscape, laying solid foundations for unrestricted and unbounded flows of information and knowledge, eliminating information asymmetries, and furthering the rapid diffusion of financial innovations worldwide. This work contributes to the literature by exploring the linkages between variations in ICT penetration and the development and expansion of financial innovation on stock exchanges in ten European countries: France, Germany, Hungary, Italy, Norway, Poland, Spain, Switzerland, Turkey, and the United Kingdom. The analysis covers the period from 2004 to 2019, and uses panel and country-specific regression models to verify the relationship hypothesized between increasing ICT penetration and the development of exchange-traded funds. Our findings indicate that ICT spreads evenly in all the countries, laying solid foundations for the development of innovative financial products. We also find that ICT positively influences the diffusion of ETFs, regardless of the other possible determinants considered; however, despite the high level of ICT adoption in most of the economies analyzed, ETF market development has not been universal, with substantial between-country differences.

HOW DOES INTERNET FINANCE INFLUENCE THE MONETARY POLICY? EVIDENCE FROM CHINA

Chinese banks have gradually expanded their financial services into overseas financial services and financial trade transactions. The financial services system is becoming more and more humanized and intelligent with the global economy's rapid development and progress. It improves the quality of banks' financial services and plays a vital role in its financial system construction and financial product innovation. As an internal driving force for the development of the financial industry, financial innovation has a vast and extensive impact on the economy. Because of the importance of monetary policy on national macroeconomic regulation and control, it is of great practical significance to study the impact of financial innovation on monetary policy effectiveness. This paper has conducted an in-depth analysis of the core concepts of internet finance, and suggestions and policy implications are given to improve China's monetary policy's effectiveness.Keywords: financial products, service innovation, monetary policy, effectiveness analysisJEL Classifications: G29, G14DOI: https://doi.org/10.32479/ijefi.11007

Financial engineering of business processes and investment of industrial companies in the innovation system of megacity

Research background: The UN usually defines cities with more than 1 million inhabitants as megacities. As of 2019, over 55% of the world’s population lives in metropolitan areas. Nowadays, rapid population growth and urban growth have created many socio-economic problems, but also created enormous potential for opportunities. On the one hand, risks, depletion of urban resources, industrial isomorphism, environmental pollution and environmental damage, and, of course, we must not forget about the global virus that is adjusting urbanization processes. On the one hand, risks, depletion of urban resources, industrial isomorphism, environmental pollution and environmental damage. And, of course, we must not forget about the global virus that is making adjustments to the processes of urbanization. On the other hand, megalopolises reduce the costs of doing business, stimulate the process of the birth of new types of business, create new forms of organizations, and create jobs. Megacities are a generator of innovation. Purpose of the article: to develop proposals for the creation of a scientific center of a representative megacity for financial support of innovations and for monitoring information flows and risks. Methods: used in the research: financial engineering, mathematical modeling, robo-advising, crowdfunding, big data technologies. Finding & Value added: Based on the results of the research, a digital platform model and methodology for creating innovative financial products will be created. The model will allow administrative staff to monitor and shape the financial policy of the metropolis. Innovative financial products will be used on the investment platform and will help solve the problem of credit deficits for companies in the early stages of their life cycle.

The Innovation and development of Rural Revitalization: Agricultural Supply Chain Finance

Agricultural supply chain finance provides a feasible supply channel for the fund demand in rural economic development, alleviates the financing difficulties of small and micro enterprises and farmers in rural areas. However, there are also problems such as low standardization of agricultural products, imperfect credit risk system and incomplete information system, which seriously hinder the implementation of Rural Revitalization strategy. Financial product innovation is put forward in this paper, giving play to the role of government-led, perfect the premium subsidy, guarantees subsidy policy, actively into more involved in the main body, using the emerging technology industrialization construction, building ecological system resource sharing, expand the scope of services, to better precision power financial poverty alleviation, finally realizes the Rural Revitalization strategy.

Modern State and Usage of Innovative Financial Products in the Textile Industry of the Ivanovo Region

Modern State and Usage of Innovative Financial Products in the Textile Industry of the Ivanovo Region

An empirical examination of the efficiency of commodity markets in India

India’s growing economic clout within the emerging market club has resulted in a steady proliferation of innovative financial products entering the capital markets. With an expansive economy presenting enormous opportunities for businesses to earn superior rates of return on capital outlays, the inherent risks arising out of a volatile global economic climate driven by a slew of geo-political factors exert enormous pressure on the management of corporations to devise strategies that are effective in mitigating some of these risks. In recent years, India has been a witness to heightened interest being evinced by financial managers towards skilfully deploying financial instruments like Futures and Options in order to overcome the uncertainty arising out of fluctuations occurring in the prices of underlying assets 1 . In this context, the role of commodity markets assumes considerable significance. Emergence of organized and sophisticated commodity markets like NCDEX (National Commodities and Derivatives Exchange) and MCX (Multi-commodity Exchange) has enabled the participants of this specialized market to strategically hedge their positions in the backdrop of volatilities witnessed in prices of underlying commodities. An implied postulate necessary for the successful performance of the hedging function is the operation of market efficiency that serves as a necessary condition for organized functioning of the market, which becomes the basis for an efficient price-discovery mechanism. In this paper, we endeavour to examine the efficiency of commodity markets in India by resorting to a rigorous econometric model. By underscoring the need to establish a relationship between the Futures and Spot markets (given that they depict a time-series behaviour), the model is better poised to examine the empirical validation of market efficiency in comparison to alternative models (variance-ratio test, jarque-bera test, and runs test etc.) that have traditionally relied upon the observed behaviour of Spot prices alone to validate the enshrined objectives. A conspicuous absence of studies involving employment of statistically robust models like cointegration regression in respect of examination of efficiency of commodity markets in emerging economies like India presents a compelling reason to undertake the present study. We employ the popular cost-ofcarry model to empirically examine the hypothesis involving efficiency of commodities market in India 2 . We reject the cost-of-carry model using both single-hypothesis and joint-hypothesis tests depicting a weak evidence of market efficiency.

Systems, Instruments and Regulatory Policies of American and European Capitalism

The beginning of the 21st century, the phenomenon of globalization, the IT revolution and the financialization of the economy have also changed the terms of the comparison among capitalist countries. At global level, the rapid expansion of the financial sector was also encouraged by an increase in innovative financial products. Regulators and supervisors have not been able to adequately identify and address the growing risks in the financial system. The beginning of the financial crisis has brought to light such weaknesses. And it is from this negative experience that the major world authorities have intervened, trying to set up plans and regulations to protect the financial system and consumers. The analysis of the framework that comes with the financial crisis of 2007-2013 is thus a starting point for this work to understand the new features of world capitalism. American and European capitalist systems seem to diverge above all on the policies and instruments for regulating the financial system. The aim of the work is to show the differences between the US and European financial and banking regulation. The former is geared towards reviving deregulation and financial innovation while the latter is more geared towards redesigning a more accentuated regulatory model with a governance of the economy that always sees the presence of a mixed welfare and market system.

Market microstructure: a comparative study of Bombay stock exchange and national stock exchange

PurposeThe present study seeks to investigate the relative edge between the market microstructure of the two leading stock exchanges of the Indian capital market, that is BSE and NSE with a focus on analysing their trading mechanism, efficiency, liquidity and volatility.Design/methodology/approachWe analyse the microstructure of BSE and NSE on the basis of: (1) trading mechanism – ownership structure, listing of securities, trading system and settlement and clearing process; (2) information efficiency using unit root test, serial correlation, runs test, variance ratio and the ARIMA model; (3) liquidity using trading statistics no. of listed Companies, market capitalisation, no. of trades etc. and (4) volatility using standard deviation and GARCH(1,1) model.FindingsA comprehensive scrutiny on microstructure of BSE and NSE makes it evident that the two leading stock exchanges of India are mostly similar and leave no scope to choose between them. Both the exchanges are demutualised corporate entities with a fully automated trading system in an order-driven market, informationally inefficient as evidenced by the predictability of returns, have shown tremendously growing trading statistics and by and large a declining trend in volatility over the years.Practical implicationsUnderstanding the components of the microstructure black-box will provide the regulatory bodies with an intellectual framework to strengthen the market architecture. Both the exchanges will get aware of the dynamics of trading, can grow to be more competitive and attract more firms for listing and investors for trading of securities. Also, investors, portfolio managers and equity analysts will be able to make better investment strategies by understanding how the market works.Originality/valueResearch in the area of market microstructure has been severely neglected, especially in the context of the Indian market. India is the world's fastest growing economies and we have witnessed tremendous reforms in the capital market. The past two and a half decades have brought about several innovations via demutualisation, screen-based trading, emergence of clearing corporations, innovative financial products and intense use of IT in the Indian stock market. A spurt of reforms and the emerging environment make it crucial to deeply analyse the market structure and design of two premier stock exchanges of India – BSE and NSE.

The Code of Capital (Book Review)

Global financial inequality was increasing before COVID-19 unleashed market and economic chaos. The pandemic has widened the wealth gap, exposing financial disparity in even the world’s most prosperous countries. While the COVID-19 crisis has expanded the fortunes of some, millions around the world face the unrelenting reality of poverty. While it’s difficult to deny the influence of ideology on the growing wealth divide, in some countries (particularly the United States) there might be another critical factor to consider – the law. In The Code of Capital – How The Law Creates Wealth and Inequality, Professor Katharina Pistor persuasively contents that “who has access to and control over the legal code” has power over the “levers” of societal wealth creation and distribution. Perhaps the book’s most contextually important contribution is the way it shows how the legal code has been used to continually “mint” debt-based instruments that are convertible into cash, universally traded, durably protected, and bestowing of priority rights on their holders. The net result is a “deeply hierarchical” but highly volatile and complex financial system. Post 2008 reforms have not eliminated the problems of unstable, contractually-driven, financial product innovation, perpetual credit generation, and the propagation of “too big to fail” financial institutions.

Analysis on the Innovation Hierarchy of Commercial Bank’s Financial based on the Big Data

Financial products are derivative products of economic and social development in a certain period. Compared with state-owned enterprise banks, commercial banks have a greater dependence on the demand for financial products. Therefore, the innovation of financial products not only caters to the market and adapts to the times, but also has important significance for the development and survival of commercial banks. Based on the above background, this paper analyzes the impact of big data on financial services by combining computer big data technology, and puts forward suggestions for small and micro-enterprise financial product innovation of commercial banks based on computer big data in view of the current difficulties in financial product innovation of commercial banks.

MODERN APPROACHES TO THE ASSESSMENT OF WAYS OF DEVELOPMENT OF FAMILY FARMS IN THE HENAN PROVINCE OF THE PEOPLE'S REPUBLIC OF CHINA

The report of the 19th National Congress of the Communist Party of China puts forward the concept of high-quality development in the new era and the strategy of rural revitalization, and family farm is an important part of Rural Revitalization and promoting the development of agricultural economy. Family farm not only insists on the basic position of family management, but also overcomes the shortcomings of traditional small-scale management of farmers. It is an effective way to develop moderate scale management of land. The current family farm in China refers to a new type of agricultural operation subject that takes family members as the main labor force, engaged in large-scale, intensive and commercialized agricultural production and management, and takes agricultural income as the main source of family income, and operates and develops under the land collective ownership and does not change the current family contract management mode. In the process of the rapid development of modern agriculture, the innovation of agricultural management mechanism and the cultivation of family farms play an important role in promoting the efficiency of agricultural production and economic benefits, and also in promoting the implementation of large-scale and intensive agricultural management in China. The emergence of family farms has changed the traditional mode of production and management, and has provided an alternative direction for the development of agriculture in China. It has become one of the new agricultural management subjects. This research analyzes the current situation and problems of development of family farms in Henan Province, formed and proposed appropriate countermeasures to eliminate them: formulate and implement appropriate measures to manage loans, increase the share of innovative financial products; to popularize the land policy, to improve the market mechanism, to formulate the reasonable norms, to calculate expenses and to define mechanisms of economic compensation of transfer of the earth; to strengthen the professional training of employees and combine modern experience in breeding and production technologies; optimize agricultural insurance to avoid risks.

FinTech, BigTech and Banks : Digitalisation and its Impact on Banking Business Models

This is a book review of Fintech, BigTech and Banks : Digitalisation and its Impact on Banking Business Models by Alessandra Tanda and Cristiana - Maria Schena. Both the authors’ effort in framing the title itself attracts the attention of the readers. The book highlights the important phase of digitalization of financial markets and services, thereby converting them into the digital economy. The book highlights micro to macro level of discussion about both the fintech and bigtech firms. Further, it elaborates on the operational and regulatory challenges faced by the financial institutions while adapting themselves to the new technologies with a sole aim to meet the customers’ expectations in terms of varied innovative products and services. It explains the strategic approach of the large banks by investing and partnering with fintech and bigtech firms with a motto of enhanced customer services by offering innovative financial products and services. The challenges faced by small banks in the competitive market are also discussed, and finally, the book synthesizes about the regulatory framework and the digitalization of financial products and services.

What explains the emergence and diffusion of green bonds?

There is growing recognition that financing low-carbon energy and environmental transitions will require the innovation of new financial products. Yet current understanding of the conditions under which environment-focused financial innovations emerge and diffuse remains limited. This paper seeks to narrow this gap. Novel to the literature, we conceptualise financial innovation by synthesising insights from several conceptual frameworks previously used to understand technological innovation and sustainability transitions. Empirically, the paper focuses on the case of green bonds, which have been deployed to (re)finance a wide range of energy- and environment-related projects. Our analysis is based on a combination of semi-structured interviews, document analysis and observations from conferences. We show that many of the same processes, influences and dynamics identified in technology-inspired frameworks have played an important role in the upwards innovation trajectory of green bonds. These include: the activities of various intermediaries and entrepreneurs; a set of largely self-reinforcing processes such as learning and legitimation; and wider contextual developments creating a more favourable selection environment for sustainability-themed, fixed-income financial products. Our analysis additionally suggests that the scaling-up of green bonds depended on the specific design and implementation of the product itself and the growing involvement of emerging economies on the supply-side.

The Influence of Marine Port Finance on Port Economic Development

Wu, H. and Fu, C., 2020. The influence of marine port finance on port economic development. In: Yang, Y.; Mi, C.; Zhao, L., and Lam, S. (eds.), Global Topics and New Trends in Coastal Research: Port, Coastal and Ocean Engineering. Journal of Coastal Research, Special Issue No. 103, pp. 163–167. Coconut Creek (Florida), ISSN 0749-0208.In order to strengthen the financial effect of the level of port economy on the regional open economy, the impact of marine port finance on the development of port economy is studied. From the three aspects of port economy and financial care, the supporting role of port economy on the marine port finance, and the financial support law of the development of international marine ports, the specific strategic deployment of port finance to promote the rapid development of port economy is determined. Six kinds of characteristic policies, i.e. joint policy guidance, perfect financial organization system, diversified investment and financing modes, financial product innovation, good financing environment construction, and building, are adopted to measure the fir index of financial related rate of marine ports. The final empirical research results show that, in the two levels of financial overview and financial measures, ocean ports will have a strong role in promoting the development of port economy. The former, as the guarantee premise for the further development of the latter, is not only a necessary condition for the implementation and popularization of international port finance, but also a mainstay to support the logistics and capital flow in and out of port areas.