Lower Transaction Costs Research Articles

DIGITAL DISRUPTION IN FINANCE: THE RISE OF FINTECH AND ITS IMPLICATIONS

This study investigated the impact of digital disruption (innovation in financial services) on customer satisfaction among users of financial technology (Fintech) related services. Primary data was collected from users of Fintech, with a focus on the Nigerian Fintech space. A quantitative mini-survey method was employed using an online data gathering tool, and the data was analyzed employing descriptive statistics and percentages. It was found that the most-used Fintech provider in Nigeria is Opay. More than half of the respondents claim to use FinTech services every day, suggesting that the channel serves the users well. On ease of use and quality of service, all respondents claimed Fintechs were either average or above average when rated. Four-fifths of the respondents found how Fintechs handle complaints to be satisfactory, while 20% think it is below average. 93% of respondents found the security architecture of FinTech platforms to be standard, while 96% found them reliable in discharging their services. 100% of the respondents are convinced they will recommend their Fintech service providers to others, including family and friends. 66.7% admitted the use of Fintech platforms limited their use of traditional intermediaries like banks, and the top reasons are high transaction costs, poor customer service, no clear interest on savings, and no access to credit, among others. Traditional financial intermediaries like banks should embrace the fast-paced, technology-driven and changing world of finance if they intend to keep up with the emerging innovations. In order to favorably co-exist with Fintechs, traditional intermediaries must consider new ways to reach the underserved, and unbanked and devise means to lower transaction costs. Fintechs need to improve on their security architecture to protect customer data and scarce funds; and must continue to value customer feedback even when they expand. KEYWORD(S): Fintech(financial technology), digital disruption, financial intermediaries, financial inclusion, transaction costs, customer satisfaction

Blockchain Technology in Construction Supply Chain Management: Enhance Transaction Speed, Cost Effectiveness and Security

The traditional construction sector encountered obstacles that prevented it from developing, including knowledge asymmetry, complicated intermediary relationships, and high transaction costs. Blockchain technology offered a more effective, secure, and convenient mode of transaction and management to the construction industry because it was a decentralized, safe, and reliable information transmission and management tool. Blockchain technology could be applied to the construction industry's supply chain to achieve traceability and supervision, enhancing the transparency and dependability of transactions. At the same time, blockchain technology could be applied to the management of the construction supply chain to achieve rapid information sharing and verification, lowering transaction costs, and increasing transaction efficiency. However, the previous study on the use of blockchain technology in the building sector was still in its infancy and required more investigation and study. This study aimed to investigate how blockchain technology could be used in supply chain management for the construction sector to address present issues. The study's goals were to examine how blockchain technology could speed up transactions and improve supply chain management for the construction industry, as well as to examine how it could lower transaction costs and increase data sharing and information transparency. This study used a semi-structured interviewing technique for the purpose of gathering and analysing data. The researcher learned more about professionals and industry experts' thoughts and experiences with blockchain technology in construction supply chain management through in-person or remote interviews with them. The advancement of the construction industry's digital transformation and information upgrading reflected the significance of this study. This study would help the supply chain management in the construction sector in enhancing the effectiveness of supply chain transactions in the construction industry and reducing the transaction cycle; lowering the price of supply chain transactions in the construction industry and boosting the industry's competitiveness; strengthening the security and reliability of supply chain transactions in the construction industry and reducing data compromise and transaction risks.

Generalized Stochastic Arbitrage Opportunities

Concepts are introduced and applied for analyzing and selecting arbitrage portfolios in the face of uncertainty about initial positions and risk preferences. A stochastic arbitrage opportunity is defined as a zero-cost investment portfolio that enhances every feasible host portfolio for all admissible utility functions. The alternative to the existence of such investment opportunities is the existence of a solution to a dual system of asset pricing restrictions based on a class of stochastic discount factors. Feasible approaches to numerical optimization and statistical inference are discussed. Empirical results suggest that equity factor investing is appealing for all risk-averse stock investors with a wide range of initial position and sufficiently low transactions costs by mixing multiple factor portfolios with high after-cost appraisal ratios, low mutual correlation, and negative exposures to the relevant host portfolios. These findings weaken the case for risk-based explanations for the profitability of factor investing. This paper was accepted by Kay Giesecke, finance. Supplemental Material: The data files are available at https://doi.org/10.1287/mnsc.2023.4892 .

A qualitative meta-analysis of issues and challenges of trade facilitation in developing countries

Trade facilitation is widely touted in the literature as a means to increase trade, capital inflows, and economic growth as a result of lower transaction costs; however, its implementation and efficacy pose challenges, especially for developing nations. Despite controversies and differing perspectives on these challenges, some of which were published prior to February 22, 2017, when the Trade Facilitation Agreement went into effect, there is no meta-analysis that evaluates the validity of these challenges. This qualitative meta-analysis is a systematic review of qualitative research examining the difficulties and obstacles developing countries face in instituting trade facilitation reforms. This document lays the groundwork for resolving general trade facilitation implementation challenges in Southern Africa, and in particular Zimbabwe. Significant obstacles to the successful implementation of trade facilitation initiatives include limited financial resources, infrastructural inadequacy, and inadequate institutional architecture. Requisite human capital inadequacy is one of the primary impediments to the successful implementation of the trade facilitation reform process. The elimination of these obstacles would unquestionably boost innovation in trade and commerce, as well as the region's trade legitimacy. Trade liberalization, improvement of legal inter-regional trade, and active participation by merchants in global value chains could be advantageous to governments in developing countries through trade facilitation.

Research on Trend Investing Strategy and Hedging Strategy

An investment method based on traditional subjective judgments faces huge challenges, while the strategy of quantitative investment is to find the optimal alpha model to judge the best timing of selling and buying and designing the most effective investment portfolio. Therefore, compared with traditional investment methods, quantitative investment breaks through the limitations of subjective judgment with its qualitative and quantitative advantages. The futures market attracts many investors with its low transaction costs and the two-way nature of transactions. However, most of the investment strategies that are frequently used in the market have low stability and do not guarantee correlation with the general market trend. This makes the investments risky, particularly for individual investors. Therefore, this paper will explore both futures investment and risk hedging strategies, aiming to ensure that every buy and sell is the correct choice as much as possible, such that futures investment is relatively stable and has high returns. This article focuses on using the moving average cross strategy through the python programming language to achieve the judgment of buying and selling in the process of futures trading and drawing the net worth curve of the real-time futures market data and perform a correlation analysis to determine which commodity sector is the most suitable using the trend strategy. For risk hedging, the article mainly uses the correlation analysis to study the relation between the prices of different types of futures. Furthermore, the futures and options market price fluctuations are discussed in depth, and also analysed is how to use and balance hedge parameters for risk hedging.

The Application of Cryptocurrencies in Non-Fungible Tokens

This paper explores the application of cryptocurrencies in Non-Fungible Tokens (NFTs). After introducing the concepts and historical background of NFTs and cryptocurrencies, the paper analyzes the advantages of using cryptocurrencies in NFTs, including decentralization, security, stable storage value, cross-border payment, low transaction cost, anonymity, programmability, and community support. However, the paper also highlights the shortcomings of this application, such as unclear laws and regulations, price fluctuations, environmental problems, technical obstacles, security risks, intellectual copyright issues, and moral and social issues. To address these challenges, the paper proposes several workarounds, such as using stablecoins to solve volatility problems, providing user-friendly interfaces and educational resources to solve complex problems, and increasing the number of merchants and service providers accepting cryptocurrencies as payment methods to solve the problem of a limitation. Finally, the paper analyzes the industry trend and its potential future direction. This paper contributes to a better understanding of the potential of cryptocurrencies in NFTs and provides insights into the development of this emerging field.

Transparency in the equity market: Evidence from a natural experiment

Regulators promote market transparency as a way to lower transaction costs and boost liquidity. However, in theory, it can hinder trading in certain circumstances as some investors may prefer a degree of opaqueness. The existing evidence on its benefits is inconclusive and depends on the market scenarios. This study aims to shed light on the issue by examining the effects of implementing the National Market System (NMS) as an exogenous shock on post-trade transparency and transaction costs. Using 11 years of data from 2834 firms on NASDAQ, we find that the NMS improved post-trade transparency, leading to a reduction in quoted and percentage spreads. Our results provide insights for creating effective policies to maintain fairness, order, and stability in the stock market.

Digital currencies as an alternative investment

Purpose: The study intends to examine the movement of digital currency prices over time and compare it to the movement of financial indicators in various stock exchanges to determine whether or not modern digital currencies can represent a global alternative to investing in financial stock exchanges, given their low transaction costs and information confidentiality, which makes them more appealing to some investors. Hypotheses: The research is based on testing two basic hypotheses (1) There is no statistically significant relationship between the movement of digital currency prices and stock index fluctuations. (2) Digital currencies cannot be used as a substitute for stock market investing. Methodology: The statistical study was conducted from January 1, 2010, to July 15, 2022, using a sample of thirteen MENA region countries' indices, as well as three global indices represented by Nasdaq, Dow Jones, and American Standard & Poor's, to represent the fluctuations of these indices. The movements of financial stock exchanges, as well as the ten most active digital currencies in terms of transaction volume at the time of the research, were used as indicators. The STATA statistical program was also employed for correlation analyses. Results: Standard deviations of samples showed that traditional currency markets are more stable than virtual ones. Because of this, it's clear that financial stock exchange traders can't use digital currencies as an alternative investment.

Currency substitution in a world of looming retail CBDCs: Suggestive currency substitution-based evidence

SummaryDigitalization, spurred by the pandemic, has accelerated plans by many central banks to introduce retail digital currencies (rCBDCs). If international coordination eventually allows individuals to hold digital multiple currencies this potentially implies greater scope for currency substitution. The potential to ease constraints on currency substitution dovetails nicely with the G20′s continuing aspiration to enhance digitalization as a “tool” to improve economic performance and reduce inequality. Nevertheless, as discussed in our study, opportunities for individuals and small businesses to exploit the promise of lower transactions costs thanks to digitalization will be difficult to realize in the current regulatory and geopolitical environment.Nevertheless, policy makers will not be able to make sensible choices unless they appreciate the scope for currency substitution in a world with rCBDCs. Accordingly, this paper provides new estimates of the potential for currency substitution using data from a cross-section of advanced and emerging economies. In relation to the existing literature, we apply existing econometric methodologies in novel ways to generate estimates of the degree of currency substitution conditional on technological and institutional factors. These are critical ingredients in the potential success of rCBDCs on a global scale.Our empirical study asks: What is the scope for currency substitution? It uses data from a cross-section of advanced and emerging economies, large and small, and with varying degrees of openness. First, we estimate for a panel using Generalized Method of Moments whether the degree of currency substitution differs between advanced (AE) and emerging market economies (EME). For narrow definitions of money, the answer is negative. For a broader definition of the money supply the differences are statistically significant. Indeed, the scope for currency substitution is larger for the group of emerging market economies considered.Next, we consider what happens when we think of the digitalization of money as a treatment or intervention. We estimate difference-in-difference models to estimate the possible impact on money demand using narrow and broad definitions of money. Generally, the results support those obtained using the GMM method although the size of the currency substitution effect is smaller.Important policy implications stem from our study. Since a currency is a symbol of sovereignty the scope for currency substitution estimated in this study suggests that the regulatory framework for rCBDCs is crucial as it determines how easily individuals can hold and transact digitally in different currencies across borders. One important implication is that new macroprudential tools might be needed to preserve the ability of countries to pursue independent monetary policies. Another implication is that, in a sufficiently liberal regulatory environment, cross-border holdings of rCBDCs might encourage more countries to adopt or stick to best practices in macroeconomic management and incentivize others who already do so to maintain these practices. Much will depend on whether policy makers allow markets to harness the promise of lower transactions costs and faster payments settlement.

Consumer Behavior in Marketing in The Digital EDGE

Digitization must have altered business and customer communication mechanisms, opening up new opportunities and lowering transaction costs. Moreover, digitalization, particularly e-commerce, is critical to the market's development because it facilitates the process relationships between users and vendors in multiple places. Digitalization is indeed probable to have overall economic advantages in the form of innovation and research, creative thinking, but also acquiring knowledge, as well as immediate and unrestricted exposure to sources of information and lower transactional indirect impacts. The objective of this research would be to look at consumer behaviour in the digital era and lead to a better understanding of digital marketing techniques, their effects on consumer behaviour and attitude, as well as start-ups like mobile apps, also resulting in effectiveness.

A Survey on Pump and Dump Detection in the Cryptocurrency Market Using Machine Learning

The popularity of cryptocurrencies has skyrocketed in recent years, with blockchain technologies enabling the development of new digital assets. However, along with their advantages, such as lower transaction costs, increased security, and transactional transparency, cryptocurrencies have also become susceptible to various forms of market manipulation. The pump and dump (P&D) scheme is of significant concern among these manipulation tactics. Despite the growing awareness of P&D activities in cryptocurrency markets, a comprehensive survey is needed to explore the detection methods. This paper aims to fill this gap by reviewing the literature on P&D detection in the cryptocurrency world. This survey provides valuable insights into detecting and classifying P&D schemes in the cryptocurrency market by analyzing the selected studies, including their definitions and the taxonomies of P&D schemes, the methodologies employed, their strengths and weaknesses, and the proposed solutions. Presented here are insights that can guide future research in this field and offer practical approaches to combating P&D manipulations in cryptocurrency trading.

The Achilles heel of interconnected user networks: Network firms and the vulnerability of rapid decline

Digital technologies have amplified firms' ability to gain and sustain competitive advantages by leveraging network effects and large user bases. They allow cheaper and better building, scaling, and operation of user networks, more efficient data collection, lower transaction costs, and ever-stronger scale advantages. Yet, the seemingly stable competitive advantage of large-scale user networks may have an “Achilles heel” that creates a strategic vulnerability. We examine this overlooked effect by studying how structural network characteristics affect the risk of rapid decline after users start to depart. We find that for user networks with small-world and scale-free properties, the departure of a few influential users can prompt strong negative network effects and accelerate the speed of a decline. To arrive at these insights, we use an analytical approach inspired by the computational networks literature to assess the impact of different structural characteristics on the likelihood of rapid collapse. Our research enriches the platform and network literature by providing fresh insights into the vulnerabilities of interconnected user networks, highlighting the risk of rapid decline. We also suggest practical implications for firms that depend on such networks for a competitive edge.

Platform information sharing and selling contract strategies with blockchain adoption

The recent rapid development of blockchain technology has drawn considerable attention. To examine the impact of blockchain on platform supply chains, we construct a supply chain consisting of two suppliers and an e-commerce platform. Each supplier may use either a reselling or an agency selling contract; therefore, three scenarios are possible: pure agency selling, pure reselling, or hybrid contracts. Considering blockchain’s role in eliminating transaction costs and achieving demand information transparency, we apply a game theory model to study each player’s pricing strategy and profits when blockchain and selling contract strategies vary. We find that the platform’s optimal selling contract and blockchain strategies strongly depend on commission rates, competition intensity, and transaction costs. Suppliers are willing to join the blockchain to gain demand information and reduce transaction costs. With low transaction costs and high competition intensity, the platform may ally itself with the agency supplier and authorize him to join the blockchain to maximize profits, which may ruin social welfare. From a social welfare perspective, we find that a pure agency contract is optimal, whereas the optimal blockchain strategy varies. Specifically, blockchain adoption may not benefit social welfare even when its operations costs are negligible. We further explore a scenario in which two suppliers can choose their selling contracts to derive insights into suppliers’ contract choices and government subsidy policies. Moreover, we explore the impact of marginal production costs on the optimal strategy for platforms.

Agri Food Supply Chain Using Blockchain

Supply chains are becoming into automated and extremely complicated networks, and they are becoming an increasingly important source of potential advantages in today's environment. In recent years, there has been a significant rise in customers' attention to concerns regarding food safety. However, tracking the source of all data and maintaining its traceability throughout the supply chain network is difficult. Traditional supply networks are centralized, and trading is done through a third party. It is a promising distribution system technology that has the potential to help agricultural supply chains by lowering transaction costs and speeding up processes while also boosting transparency and security. Blockchain for Agri-food supply chain has the potential to transform the agricultural industry by optimizing all stages of the supply chain and enabling for the tracking of products from the field to the retail shelf. The Agri-food supply chain also has the potential to be implemented digitally as a cost-cutting measure and yield accelerator for the food industry's supply networks.

Where does ex‐dividend trading occur: An examination of trading venues around dividends

AbstractWe examine the fragmentation of trading around the ex‐dividend date. We argue that the taker‐maker and dark trading venues provide potential dividend capture traders a more favorable platform than the maker‐taker venue(s) given the price improvement, lower queues, and lower net transaction costs. Our evidence indicates that taker‐maker (dark) venue market share decreases (increases) on cum‐dividend days but reverts to normal levels on the ex‐dividend day. Additionally, we find fragmented trading impacts the ex‐dividend price change and improves price efficiency. Finally, we find evidence that retail trades are associated with potential dividend‐capture trading.

“One-size-fits-all” public works contract does it better? An assessment of infrastructure provision in Italy

Public infrastructure procurement is a crucial policy tool, a prerequisite for public and private investments and for economic and social capital growth. Low performance in execution severely hinders infrastructure provision and benefits delivery. One of the most sensitive phases in public infrastructure procurement is the design because of the strategic relationship that it potentially creates between procurers and contractors in the execution stage, affecting the costs and the duration of the contract. In this paper, using recent developments in non-parametric frontiers and propensity score matching, we evaluate the performance in the execution of public works in Italy. The analysis provides robust evidence of significant improvement of performance where procurers opt for design and build contracts, which lead to lower transaction costs, allowing contractors to better accommodate the project in the execution. Our findings bear considerable policy implications.

Blockchain Technology in Various Fields: Applications, Challenges, And Future

Blockchain technology has revolutionized many industries and has great potential outside of finance. This paper explores blockchain's applications and challenges in agriculture, electricity, transportation, healthcare, and finance. Blockchain technology can track agricultural product origin, quality, and safety to improve supply chain transparency in agriculture. Blockchain can also reduce intermediaries, improve payment systems, and expand financing. Blockchain can enable decentralized electricity management, peer-to-peer energy transactions, and lower transaction costs. It could boost renewable energy integration, grid efficiency, and energy access for underserved communities. Blockchain technology can improve transportation supply chain visibility and reduce fraud by providing a shared, tamper-proof ledger to track goods and prevent unauthorized access. Blockchain can secure, interoperable, and improve patient privacy in healthcare. It could let patients share their health data with providers and researchers while protecting their privacy. Blockchain implementation is also tricky. Scalability, interoperability, compliance, and data privacy Blockchain solutions must handle large amounts of data, integrate with existing systems, comply with laws and regulations, and protect sensitive data. Further research and development are necessary to explore blockchain technology's possibilities in these fields fully.

Price discovery and triangular arbitrage in currency markets

Price discovery is the process by which markets incorporate the relevant information to arrive at the efficient price of an asset. We study the price discovery process in JPY/EUR cross-rates and the rates derived from exchanges of JPY/USD and USD/EUR indirectly. The results highlight the role of the USD as a vehicle currency in enhancing price efficiency through the triangular arbitrage. During financial crisis periods, the implied JPY/EUR rates have even more contribution to price discovery than direct rates. We show the dominant price discovery of implied JPY/EUR rates relates to the lower transaction cost. Upon the release of macroeconomic announcements in Japan and Europe zone, the trading cost advantage enhances price discovery of implied rates even more. The more contribution to price discovery of implied rates predicts the higher future volatility of direct JPY/EUR rates, indicating the slower response of direct rates to the information shock and the subsequent adjustment resulting in higher variations in the direct rates.

Role of Knowledge Sharing Culture and Knowledge Management on the Corporate Performance: A Theoretical Discussion

In this paper, an attempt has been made to illustrate the significance of Knowledge Sharing Culture (KSC) and Knowledge Management (KM) on the performance of a company. Besides, the various issues pertaining to KSC and KM in a corporate organisation have dieoretically been discussed in detail by reviewing some of the important case studies. The management of knowledge and developing a sound KSC assume a very significant role in die corporate structure in accomplishing numerous objectives of a firm, namely, competitive advantage, performance, profit, lower transaction cost, agency cost etc., in the post 1990s era. Developing a sound KSC dirough KM brings about lot of advantages in a company in terms of revenue, marketing and cost of production. However, the development of KSC depends largely on die organisational, technical, managerial and technical cultures/environments of a company. These cultures are to be nurtured and developed in order to improve and install a sustainable KSC for accomplishing the corporate objectives in the highly competitive world economy in the long run. The focus of die managers should be on the various components of corporate cultures and factors before embarking on in installing and improving a sound KSC to enhance the overall performance of a company.

Analisis faktor – faktor yang mempengaruhi kepuasan pengguna aplikasi mobile IPOT

This research aims to determine the effect of completeness of features, ease of use, and low transaction costs on the satisfaction of using the IPOT mobile application. This research uses a quantitative research method with data analysis techniques, namely multiple linear regression. The data source for this study uses primary data sources which are assisted in processing by IBM SPSS 23 software The results of this research indicate that simultaneously and partially, the variables of feature completeness, ease of use, and low transaction costs have a positive and significant influence on the satisfaction of using the IPOT mobile application This research can provide a basis for other researchers conducting other similar studies to increase the satisfaction of users of the Mobile IPOT application