We formalize the idea that the financial sector can be a source of non-fundamental risk. Households' desire to hedge against price volatility can generate price volatility in equilibrium, even absent fundamental risk. Fearing that asset prices may fall, risk-averse households demand safe assets...

We provide new evidence on the effects of competition on incumbents' innovative behavior by examining the rise of FinTech start-ups over the period 2000-2016. We employ machine learning techniques to classify a large global sample of patent applications into five FinTech categories. We exploit...

The contribution of financial and non-financial risks to the overall level of risk in the system depends on the current state of the EU banking system (which, in the aggregate and compared with banking sectors in other major advanced economies, cannot be characterised as strong) and how...

We ask whether epidemic exposure leads to a shift in financial technology usage and who participates in this shift. We exploit a dataset combining Gallup World Polls and Global Findex surveys for some 250,000 individuals in 140 countries, merging them with information on the incidence of...

The years following the 2008 financial crisis have been characterized by the emergence of new financial service providers, so-called fintech. The term is defined and understood differently in the literature. There is an agreement that fintech is composed of the words "financial" and...

How far can shoe-leather go in explaining the welfare cost of inflation? Using a unique set of microeconomic data on households, we estimate the parameters of the demand for money derived from the generalized Baumol-Tobin model. Our data set contains information on average holdings of cash, on...

Innovation and technology have led to the redefinition of business models and development of new ones in many bricks and mortar sectors. Similarly, blockchain and fintech have impacted the finance and banking industries and are expected to further affect them in the future, leading some media to...

The years following the 2008 financial crisis have been characterized by the emergence of new financial service providers, so-called fintech. The term is defined and understood differently in the literature. There is an agreement that fintech is composed of the words "financial" and...

Derivative financial instruments play a very important role in financial markets, but they are seen as rather contradictory and their impact on financial markets and the stability of these markets has not been comprehensively examined. Therefore, the aim of this article is to systematise the...

This study examines the hedging effectiveness of financial innovations against crude oil investment risks, both before and during the COVID-19 pandemic. We focus on the non-energy exchange traded funds (ETFs) as proxies for financial innovations given the potential positive correlation between...

We ask whether epidemic exposure leads to a shift in financial technology usage and who participates in this shift. We exploit a dataset combining Gallup World Polls and Global Findex surveys for some 250,000 individuals in 140 countries, merging them with information on the incidence of...

What sows the seeds of financial crises, and what policies can help avoid them? I model the interaction between the ex-ante production of assets and ex-post adverse selection in financial markets. Positive shocks that increase market prices exacerbate the production of low-quality assets and can...

Small and Medium-Sized Enterprises (SMEs) constitute the backbone of all market economies worldwide; the EU is not an exception. As such, they merit particular attention from the part of the public authorities, in times of financial crisis when alternative financing sources are needed....

Forschung, Entwicklung und Innovationen gelten als eine der wichtigsten Grundlagen für den Erhalt der Wettbewerbsfähigkeit eines Unternehmens, einer Branche oder eines Landes. Dies gilt für den Dienstleistungssektor in gleicher Weise wie für das verarbeitende Gewerbe. Auch Banken und...

Economic frictions such as information asymmetries and economic forces such as economies of scale and scope give rise to financial intermediaries. These frictions and forces also shape market structure. While technological advances are not new to finance, digital innovation has brought major...

This paper uses a dynamic general equilibrium model to examine whether financial innovations destabilize an economy. Applying a neoclassical production function, we demonstrate that as financial frictions are mitigated, the economy loses stability and a ip bifurcation occurs at a certain level...

This study examined the implication of financial innovation on financial depth and economic growth in Kenya using quarterly data covering the period 2009 to 2020. Based on autoregressive distributive lag models, we demonstrate a positive relationship between financial innovation and financial...

The traditional innovation-growth view posits that financial innovations help facilitate risk sharing, complete the market, and ultimately improve allocative efficiency. However, financial innovations are often attributed as the root cause of the Global Financial Crisis, by engineering...

This paper presents an empirical test of the proposition that control of a monetary aggregate will generate a rise in its velocity.The test is carried out utilizing the Canadian experience of controlling Ml growth from 1975:3 to 1982:3. Section One of the paper presents evidence of the...

This study utilizes firm-level data from the World Bank's Enterprise Survey Indicator Database, conducted between 2009 and 2018 for 32 countries in Africa, to examine the causal relationship between firm productivity, innovation, and financial development. We show evidence that firm innovation...

We investigate which indicators of a firm's innovation activities are associated with financial constraints and analyse the nature and direction of causal links between innovation and financial constraints. By estimating simultaneous bivariate probit models on data from the UK Innovation...

This paper examines the cross-sectional relation between leverage and future stock returns. Prior research documents a puzzling negative correlation. We show that it is largely caused by firms' use of internal financing when having significant off-balance-sheet operating assets due to...

Consistent with information-based theories, ``regular'' ETFs (i.e., those without embedded leverage) are more liquid than their underlyings. Consistent with speculation-based theories, levered ETFs have substantially higher intermediation costs than regular ETFs. The cost difference between...

Today, businesses operate in a highly dynamic and highly volatile market that requires timely and accurate responses. It is precisely the modern and dynamic financial environment that puts many challenges in front of the business of the company, confronts them with the advancement of modern...

Motivated by the world-wide surge of FinTech lending, we analyze the implications of lenders' information technology adoption for financial stability. We estimate bank-level intensity of IT adoption before the global financial crisis using a novel dataset that provides information on hardware...

In this study, we use the liquid and efficient bond ETF prices and CDX spreads to quantify the effects of the announcements of the Primary and Secondary Market Corporate Credit Facilities on the underlying corporate bonds. We find that those announcements triggered: (i) large and positive jumps...

In this study, we use the liquid and efficient bond ETF prices and CDX spreads to quantify the effects of the announcements of the Primary and Secondary Market Corporate Credit Facilities on the underlying corporate bonds. We find that those announcements triggered: (i) large and positive jumps...