Lower Transaction Costs Research Articles

The Role Of Blockchain Technology In Enhancing Financial Inclusion

Blockchain technology has emerged as a transformative force with the potential to greatly improve financial inclusion, especially among underbanked and unbanked communities. Financial inclusion refers to the accessibility and availability of financial services for all individuals, yet billions remain excluded from formal financial systems. Traditional banking often overlooks these populations due to geographic barriers, high transaction fees, and strict regulatory frameworks. Blockchain provides a decentralized, secure, and transparent platform for financial transactions, allowing individuals to access services without relying on traditional banking infrastructure. By removing intermediaries, blockchain lowers transaction costs, accelerates service delivery, and enhances transparency. It enables peerto-peer transactions, facilitates cross-border remittances, and supports micro-lending through smart contracts, thereby broadening access to vital financial services. Furthermore, the immutable and auditable characteristics of blockchain foster trust in financial systems, particularly in regions plagued by weak institutions or corruption. However, despite its promise, blockchain faces substantial hurdles such as regulatory uncertainties, limitations in technological infrastructure, and cryptocurrency volatility that impede widespread adoption. Integrating blockchain with complementary technologies like mobile banking and the internet could further enhance its role in advancing financial inclusion. This paper investigates the diverse effects of blockchain technology on financial inclusion while critically analyzing both its potential advantages and the challenges that must be addressed to fully leverage its capabilities in promoting global financial access and equity.

High-Turnover vs. Low-Turnover Mutual Funds: A Comparative Analysis of Value Addition Over Different Horizons

This qualitative literature review examines the comparative analysis of value addition between high-turnover and low-turnover mutual funds across different investment horizons. Through an extensive review of recent studies, the review identifies key performance metrics, market dynamics, and investor preferences associated with each strategy. High-turnover funds demonstrate superior short-term performance metrics, driven by active management strategies aimed at capitalizing on market inefficiencies and rapid information incorporation. In contrast, low-turnover funds offer stable long-term returns with lower transaction costs and reduced volatility over extended horizons. The review also explores the implications of turnover rates on market efficiency, investor welfare, and regulatory considerations. Limitations include variations in data availability, methodological approaches, and the dynamic nature of financial markets. Future research directions emphasize standardized methodologies, global market analysis, and the long-term impact of regulatory reforms on fund management practices and investor outcomes.

Tests for market failures and overcoming transaction costs barriers to market participation in Afghanistan

AbstractSimilar to other fragile poor countries, the majority of the rural population in Afghanistan depend directly or indirectly on small-scale farming for their livelihoods, and poor infrastructure and other barriers restrict access to markets and services, making improving access to local input markets a significant challenge for policymakers aiming to increase productivity. This paper offers empirical evidence addressing two important issues for smallholder participation in input markets: are rural markets incomplete or failing and how do transaction costs affect participation in factor markets? Pooled cross-sectional data from three waves of nationally representative surveys between 2011 and 2016 with a sample of nearly 21,000 households are used. The analysis first tests and rejects the separability hypothesis that household production and consumption decisions are independent which can be interpreted as evidence of market failures. A control function approach with instrumental variables to address endogeneity is employed to estimate household input market participation decisions. Ownership of or access to information and communication technology and transport equipment are used as proxies for transaction costs. Results confirm that lower transaction costs increase input market participation and expenditure on inputs by farm households. Additionally, households with better access to roads and district or provincial market centres have higher market participation and expenditure on input. Reducing transaction costs plays an important role in input use, potentially increasing productivity and incomes.

Contentious public finance: how entanglement shapes the costs of resisting elitist budgetary preferences

Entangled political economy views societal phenomena as featuring substantial interaction between economic and political entities, but questions have been raised about the conceptual properties of entanglement. The political economist Randall Holcombe has raised questions concerning the economic influences affecting uneven patterns of entanglement between entities. Drawing upon his own transaction costs-based framework of political stratification, Holcombe suggests that political elites incur relatively low transaction costs associated with bargaining over policies, whereas non-elites incur relatively high costs. This suggests that elites actively participate in policy design and implementation and can outmaneuver the non-elite public to externalize the costs of political decisions, yielding noticeable clustering effects within entangled network structures. This article seeks to build upon Holcombe’s insights, as well as the transaction cost politics of Charlotte Twight, illustrating how groups engaging in political processes attempt to manipulate transaction costs to secure favorable outcomes. Transaction cost manipulation by elites to secure advantages is commonly studied, but less so is how non-elitists succeed in adjusting the transaction costs of political exchanges to help prevent fiscal exploitation by elitists. The public finance case of Colorado’s Taxpayer’s Bill of Rights is used to illustrate how dynamic entanglements between elites and non-elites delivered institutional change better aligning with non-elite fiscal preferences.

Әртүрлі оқиғалардың криптовалюта құнына әсерін талдау

The relevance of the research topic is due to the fact that many crypto investors are attracted by the high liquidity of cryptocurrencies, low transaction costs and ease of transactions via the Internet. In contrast from Fiat currencies, corporate stocks, and bonds, cryptocurrencies do not have an underlying value. demand therefore market cost to a greater extent depends on how wellknown and popular this cryptocurrency is. Also, the price of cryptocurrencies is influenced by market sentiment, namely the thoughts, feelings and emotions of investors regarding the asset. With the help of traditional asset valuation models, it is impossible to qualitatively explain the latest changes in the price of cryptocurrencies. However, some financial models point to that cryptocurrency is currently overvalued. Apparently, the hypothesis of financial instability is better than any of the verified economic theories suitable to explain recent changesin prices of cryptoassets. The theory suggests that because the cryptocurrency market is moving against the macroeconomic fundamentals of the economy, emotions are a major factor. determining demand on a given market. In this article, the authors examined the influence of behavioral financial factors on investment decisions in the cryptocurrency market. Multiple regression analysis was used to examine this effect. The purpose of the article is to study the development of cryptocurrency in Kazakhstan and assess the impact of events on the value of cryptocurrency. Based on this goal, the authors put forward the following tasks: to analyze and evaluate the use of cryptocurrencies in the modern economy; explore the features of cryptocurrency pricing.

Diversification and idiosyncratic volatility puzzle: Evidence from ETFs

Exchange Traded Funds (ETFs) are considered diversified portfolios with low transaction costs and high liquidity. We test the impact of idiosyncratic risk on the cross-sectional returns of ETFs. We find the magnitude of idiosyncratic risk for U.S. equity ETFs is less than half of that of the sector equity ETFs. We show evidence that the idiosyncratic volatility (IVOL) puzzle only exists for sector equity ETFs, albeit they have a significant number of constituents. These findings are robust to ETF price, size, liquidity, different idiosyncratic risk estimates, and the subset of ETFs with a large number of constituents.

A Comprehensive Analysis of the Impediments Perceived by the Members of Farmer Producer Organizations in North Bihar, India

The agriculture sector in India is currently facing several challenges, such as increasing landholding fragmentation, diminishing per-capita land availability, and rural youth's disinterest in farming. FPOs help small and marginal farmers by lowering transaction costs, facilitating credit sources for farmers, providing technical guidance, producing support and capacity building, and creating long-term sustainability to improve the farming community. This study investigates the constraints perceived by members of FPOs. Data were collected from 240 members across 6 FPOs. An ex-post facto research design was used to study four broad constraints regarding Producer Organization Promoting Institution’s (POPI’s) support, marketing, organizational technical and operational constraints. The Friedman two-way ANOVA rank test was used to analyze thirty-five statements under four broad constraints. The findings revealed that marketing is the most severe constraint, followed by constraints regarding POPI’s support as well as organizational, technical, and operational support. Under marketing constraints without guaranteed procurement systems, inadequate storage facilities are most severe. Under constraints perceived by FPO members regarding POPI’s support, considering resource-affluent areas and exclusive attention to progressive farmers are significant. Competition of villages to get benefits and irregular procurement of the produce are most significant constraints under organizational and technical constraints. The research indicates that by overcoming these obstacles with better infrastructure, fair distribution of resources, and improved connections to markets, one can boost the sustainability and economic feasibility of Farmer Producer Organizations, thereby enhancing socio-economic benefits for farmers in North Bihar.

Managing Climate Risks and Adaptation in Coastal Communities: How to Provide Information

In recent years, climate adaptation has gained significant attention from policymakers and public managers. In the U.S., states play a crucial role in developing coastal management policies, initiatives, and programs to reduce climate risks and enhance protection against extreme weather. Despite various approaches, few studies have examined information provision tools for coastal hazard mitigation and climate adaptation. As a result, there is limited knowledge about effective adaptation tools with low transaction costs. Using the StormSmart Coasts program as a case study, this research explores information-based climate adaptation and the components needed for a successful information-sharing platform. Established by the Massachusetts Office of Coastal Zone Management in 2008, StormSmart Coasts is a web-based program offering practical information for hazard mitigation to local decision-makers and communities. The study identifies three key features of an effective tool: providing tailored information to different stakeholders, serving as an outreach tool, and connecting with diverse stakeholders, including local managers and homeowners. The findings suggest that a well-designed information-sharing tool can enhance adaptive capacity and improve climate change preparedness in coastal communities.

MARKET EFFICIENCY AND STABILITY IN THE ERA OF HIGH-FREQUENCY TRADING: A COMPREHENSIVE REVIEW

This comprehensive review analyzes the impact of high-frequency trading (HFT) on market efficiency and stability, synthesizing insights from 50 peer-reviewed articles, industry reports, and regulatory documents. High-frequency trading, which leverages sophisticated algorithms and high-speed data networks, has significantly transformed financial markets. The review confirms that HFT enhances market efficiency by providing liquidity and facilitating rapid price discovery, contributing to tighter bid-ask spreads and lower transaction costs. However, it also highlights several challenges, including market fragmentation, increased volatility, and potential for market manipulation. The review examines how HFT can exacerbate market instability and systemic risks, as demonstrated by incidents like the 2010 Flash Crash. It underscores the importance of robust risk management practices and regulatory measures to mitigate these risks and enhance market resilience. While current regulatory frameworks have had some success, continuous adaptation is necessary to keep pace with rapid technological advancements. Additionally, the review points to the potential of AI and machine learning in improving market surveillance and risk management. Ultimately, the findings suggest that a balanced approach to regulation and innovation is crucial to maximizing the benefits of HFT while ensuring market integrity and stability.

Research on the Impact of Digital Currency on the Money Multiplier: Insights from the Money Multiplier Formula

This study examines the impact of digital currencies on the money multiplier. Through a comprehensive analysis of various factors, including cash leakage rate, deposit reserve ratio, time deposit ratio, and the proportion of digital currencies in circulation, the study reveals important insights into the relationship between digital currencies and the money multiplier. The findings indicate that the adoption of digital currencies reduces cash leakage rate by providing an alternative to traditional cash, thereby expanding the money multiplier. Digital currencies also influence deposit reserve requirements, either decreasing or increasing the need for reserves, depending on regulatory responses. Furthermore, digital currencies affect the proportion of time deposits, as they lower transaction costs and make long-term deposits more attractive, contributing to the expansion of the money multiplier. Importantly, the study uncovers a positive relationship between the proportion of digital currencies and the magnitude of the money multiplier. As digital currencies gain prominence and their share in the currency system increases, their impact on the money multiplier becomes more pronounced.The study highlights the implications for policymakers, central banks, and financial institutions, emphasizing the need for adaptive strategies in response to the changing landscape of digital currencies. Further research is encouraged to deepen our understanding of the broader implications of digital currencies on the economy and financial system.

To collaborate or not to collaborate: A transaction cost economics approach to construction contracts in public-private partnerships

Public-Private Partnerships (PPPs) are often seen as a cost-effective way of providing public infrastructure. However, mega-construction projects involve many hidden costs that arise during the project life cycle. These costs are known as transaction costs. This article investigates how a construction contract under a PPP can reduce transaction costs. Using Transaction Cost Economics (TCE), the article draws on empirical studies from six countries to identify four factors that affect transaction costs in construction contracts namely: (i) Concessionaire predictability, (ii) Contractor predictability, (iii) Project Management Efficiency, and (iv) Project Environment Uncertainty. Different types of construction contracts were comparatively analysed against the aforementioned four factors. The findings indicate that collaborative contracts are more likely to favourably address these four factors by lowering transaction costs compared to non-colloborative contracts. The article concludes that using collaborative contracts can make infrastructure PPPs more affordable than other public procurement methods.

The Economic Importance of Industrial Cooperation and How It Affects the Pursuit of Economic Effectiveness

Worldwide economic environments are significantly shaped by industrial cooperation, which also affects the efficacy and efficiency of economic initiatives. This paper explores the complex aspects of industrial cooperation and how they affect economic effectiveness. Through an analysis of different types of cooperation, such as supply chain integration, joint ventures, and strategic alliances, this study clarifies the ways in which cooperation promotes competitiveness and economic progress. The study examines how industrial cooperation promotes innovation ecosystems, improves technological dissemination, and optimizes resource allocation through an interdisciplinary lens that draws from economics, management, and sociology. Additionally, it looks into how cooperation might lower transaction costs, promote economies of scale, and mitigate market failures. The research does, however, also recognize the difficulties and the negative effects of industrial collaboration, such as the expense of coordination, information asymmetry, and the possibility of anti-competitive activity. This article emphasizes how crucial it is to foster collaboration between various industries and businesses in the Republic of Uzbekistan in order to advance economic growth and pave the path toward modern society's well-being. Furthermore, pragmatic strategies for elevating creative processes to a new plane were taken into account. We looked at how various industrialization strategies at the national and international levels of the economy show up in real life as well as the policies that need to be put in place in our nation to go in this direction. The method's benefit is emphasized.

Assessing the Efficiency and Potential of China’s Apple Exports

This study elucidates the factors impacting China’s apple trade, its efficiency, and opportunities for increased revenue. This study adopts a stochastic frontier gravity model on China’s apple exports data, covering the period from 1997 to 2022 across 38 significant trading partners. The finding demonstrates that the economic growth of China and its trading partners substantially boosts apple export volumes, with a positive correlation between GDP growth and export flows. The research also highlights the deterrent effect of geographical distance on exports and reveals a complex negative relationship between the per capita GDP of importing nations and export efficiency, shedding light on the nuanced nature of trade dynamics. Furthermore, the study finds that the appreciation of China’s currency plays a crucial role in enhancing export efficiency by lowering transaction costs. Meanwhile, increased agricultural land in importing countries presents competitive challenges, impacting export performance negatively. Geographical proximity and infrastructural features, such as shared borders and lack of access to seaport, are identified as significant factors in export efficiency. The analysis unveils considerable untapped export potential in various countries, suggesting a strategic avenue for market expansion. To optimize China’s apple export strategy, policymakers are advised to consider currency management, negotiate trade agreements that mitigate distance and per capita GDP effects, and target markets with high untapped potential, thereby facilitating sustainable growth in China’s apple export sector.

A Transaction Cost Model of Tax-Motivated Income Shifting into Dot-Sized Tax Havens and an Empirical Examination of E-Commerce Effects

ABSTRACT Our paper develops a new transaction cost model of tax-motivated income shifting. We analytically show that income shifted by U.S. multinational parent corporations into their tax haven subsidiaries differs from predictions based only on tax rate differences because of the transaction costs of shifting income into tax haven subsidiaries. Our model predicts that e-commerce facilitates greater income shifting by lowering the transaction costs of income-shifting operations, which theoretically supports our focus on actual income shifting instead of the traditional focus on effective tax rates alone. Empirically, we find that greater numbers of multinational corporations’ dot-sized tax havens significantly increase profits shifted out of their U.S. parent corporations and also show with a separate estimation that this amount is similar to amounts shifted into their tax haven subsidiaries, consistent with income shifting being a zero-sum strategy. This novel approach documents income shifting materially increasing with e-commerce activities that lower transaction costs. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: H26; L81; F38; M48.

A framework for security improvement on usage of mobile money application based on iris biometric authentication method

ABSTRACT Offering transactions through mobile devices has many advantages, such as cashless payments, lower transaction costs, and provide employment opportunities. However, it introduces access security challenges that must be dealt with, which may allow unauthorized access, resulting in theft. This work proposes a framework to improve security on the usage of Mobile Money Services (MMS) by using two-factor authentication (2FA) of PIN and iris biometric authentication method (IRBAM). The rapid application development (RAD) approach was used to develop mobile money applications based on the proposed framework. The proposed framework will improve the security of accessing MMS.

An Efficient and Scalable Framework for Decentralized Finance Application Using Blockchain Interoperability

In recent years, blockchain technology has drawn a lot of attention, especially in the field of decentralised finance (De-Fi). However, scalability problems have come to light as a significant obstacle to the broad use of blockchain-based applications. To solve the issue of scalability, this paper has created a decentralised finance application with three main components: the addition of more liquidity to the swapping application, the implementation of a Polygon Proof of Stake bridge to enable efficient asset transfers, and the ability to transfer tokens between accounts seamlessly regardless of network agnosticism. The first feature, network agnostic capabilities for interoperability, facilitates token transfers between blockchain networks, allowing users to access and transact across them with ease The second component, the Polygon Proof-of-Stake bridge, makes asset transfers more efficient by taking advantage of the Polygon network's scalability advantages, which drastically lower transaction costs and processing times. Finally, adding more liquidity to the swapping programme makes it more scalable by guaranteeing that there is enough money for transactions, which prevents delays and bottlenecks. The scalability issue with blockchain technology is efficiently resolved by adding these three characteristics to the decentralised finance application, creating new opportunities for the mass acceptance and utilisation of blockchain-based financial services.

An Efficient and Scalable Framework for Decentralized Finance Application Using Blockchain Interoperability

In recent years, blockchain technology has drawn a lot of attention, especially in the field of decentralised finance (De-Fi). However, scalability problems have come to light as a significant obstacle to the broad use of blockchain-based applications. To solve the issue of scalability, this paper has created a decentralised finance application with three main components: the addition of more liquidity to the swapping application, the implementation of a Polygon Proof of Stake bridge to enable efficient asset transfers, and the ability to transfer tokens between accounts seamlessly regardless of network agnosticism. The first feature, network agnostic capabilities for interoperability, facilitates token transfers between blockchain networks, allowing users to access and transact across them with ease The second component, the Polygon Proof-of-Stake bridge, makes asset transfers more efficient by taking advantage of the Polygon network's scalability advantages, which drastically lower transaction costs and processing times. Finally, adding more liquidity to the swapping programme makes it more scalable by guaranteeing that there is enough money for transactions, which prevents delays and bottlenecks. The scalability issue with blockchain technology is efficiently resolved by adding these three characteristics to the decentralised finance application, creating new opportunities for the mass acceptance and utilisation of blockchain-based financial services.

Banking with Agents: Experimental Evidence from Senegal

This paper uses a randomized controlled trial to study the effects of access to agent banking. Individuals were encouraged to open an account and transact at a banking agent or a branch of a financial institution. Compared with individuals who were sent to the branch, individuals sent to an agent increased the number of transactions and incurred lower transaction costs with the agent. These transactions are, however, only half as large as those made at the branch because branch tellers are less likely to share information about clients with others. Banking with agents thus entails a trade-off between lower transaction costs and lack of privacy.

How Can Price Promotions Make Consumers More Interested? An Empirical Study from a Chinese Supermarket

Price promotions are commonly employed to enhance supermarket performance and the sustainable development of the retail industry, yet their effectiveness may vary among similar supermarket chains. In contrast to Western countries, Chinese supermarkets are typically community-centered, allowing consumers to make frequent visits due to lower transaction costs. This multiple-visit pattern discourages substantial one-time purchases based on promotions. This study aims to investigate how pricing promotions can attract consumers more effectively and which product categories are most suitable for this purpose. Utilizing scanner data from Chinese chain supermarkets, we empirically assess the impact of promotion depth, breadth, and duration on consumer purchasing behavior using fixed effects models, IV, and GMM methods. Furthermore, we identify product category characteristics that are more appealing to consumers based on the relationships between different product category promotions and consumer behavior. Results demonstrate that each of the three price-promotion features has a positive effect on Chinese supermarket performance, with varying degrees of significance. Different promotion methods not only benefit promoted products but also stimulate sales of non-promotional items. At the product level, the impact of supermarket promotions on performance differs across categories. The most attractive category in terms of consumer purchases influenced by discounts is special paper, while small kitchen appliances have the least impact. Promoting categories with lower average prices, higher average sales volumes, fewer products, and better storage durability is conducive to attracting consumer shopping. These empirical findings have implications for academic research on price promotion theory and supermarket managers’ pricing strategy decisions, as well as the sustainable development of the offline retail industry.

Backward Vertical Integration Strategies and Competitiveness of Firms in EPZ Kenya

Purpose: The main purpose of the study was to determine the influence of backward vertical integration strategies on the competitiveness of firms in the Export Processing Zones (EPZ), Kenya.
 Methodology: Both quantitative and qualitative approaches were used in this study, meaning that both descriptive statistics and inferential statistics were employed. Descriptive technique, specifically survey was used in the research design. The target population was all the 137 EPZ firms within Kenya and the sample was drawn from this population. The stratified random sampling technique was used. The EPZ firms are situated within the 74 gazetted zones, out of which 69 are privately owned and operated while 5 are public zones. The quantitative data that was collected was analyzed using the Statistical Package for Social Scientists. Further, the significance level of each independent variable was tested against the dependent variable at 95% level of confidence using ANOVA, regression and correlation techniques. 
 Findings: The findings showed that backward vertical integration strategies had a positive and significant influence on the competitiveness of firms in EPZ, Kenya, at 0.151, p<0.05 and 0.432, p<0.05 when the moderating variable firm size is included.
 Unique Contribution to Theory, Practice and Policy: This study contributes to both the resource-based view and the theory of dynamic capabilities. It lays emphasis on the importance of resources in attaining competitiveness as suggested in these theories. Besides, the study emphasizes the need for firms to have policies aimed at ensuring raw materials supply stability, lower transaction costs and enhanced economies of scale. The findings of this study are significant because the Government of Kenya envisages that the EPZ program is expected to play a critical role in the manufacturing sector contributing 20% to Gross Domestic Product (GDP) by 2030. This will subsequently lead to an increase in employment opportunities, real-value added growth, and foreign direct investment (KNBS, 2022). The study recommends a review by the EPZ Authority in Kenya , of the underlying aim of using backward vertical integration strategies as means of gaining competitive advantage competitiveness and the inclusion of this strategy in the various EPZ firm’s policies and procedures.