Can we have a general theory of financial innovation processes? A conceptual review

Khraisha, Tamer; Arthur, Keren Naa Abeka

doi:10.1186/s40854-018-0088-y

Cited by 47 publications

(32 citation statements)

References 123 publications

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“…Over the decade since the 2008 financial crisis, the literature on banking and finance has seen renewed interest in a number of areas, including the nexus between loan growth, regulation, diversification, and competition, and the development indicators for risk, capital management, and efficiency of banks (Kashif et al 2016;Bokpin 2016;Fanta 2016;Zheng et al 2017;Ozili 2017;Khraisha and Arthur 2018). Interest has also grown regarding banking industry performance in terms of allocation efficiency, risk management and profitability (Moudud-Ul-Huq 2017; Hamdi et al 2018), the application of manifold learning approaches (Huang and Kou 2014;Yan et al 2017), and the implications of Basel III for banking sector development (Ramlall and Mamode 2017).…”

Section: Introductionmentioning

confidence: 99%

Size, efficiency, market power, and economies of scale in the African banking sector

Asongu

Odhiambo

2019

Financ Innov

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There is a growing body of evidence that interest rate spreads in Africa are higher for big banks compared to small banks. One concern is that big banks might be using their market power to charge higher lending rates as they become larger, more efficient, and unchallenged. In contrast, several studies found that when bank size increases beyond certain thresholds, diseconomies of scale are introduced that lead to inefficiency. In that case, we also would expect to see widened interest margins. This study examines the connection between bank size and efficiency to understand whether that relationship is influenced by exploitation of market power or economies of scale. Using a panel of 162 African banks for 2001-2011, we analyzed the empirical data using instrumental variables and fixed effects regressions, with overlapping and non-overlapping thresholds for bank size. We found two key results. First, bank size increases bank interest rate margins with an inverted U-shaped nexus. Second, market power and economies of scale do not increase or decrease the interest rate margins significantly. The main policy implication is that interest rate margins cannot be elucidated by either market power or economies of scale. Other implications are discussed.

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Section: Introductionmentioning

confidence: 99%

Size, efficiency, market power, and economies of scale in the African banking sector

Asongu

Odhiambo

2019

Financ Innov

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“…These include new applications, processes, products, business models in the financial services industry, consisting of one or more additional financial services and are provided as a comprehensive process over the Internet. The main distinctive features of FinTech compared to technological or scientific innovations are legal unpatentability, short lead time, decomposability and adaptability, multiple stakeholder involvement but with limited customer involvement 6 . As a rule, FinTech is introducing new ways of doing financial activities or changing existing ones.…”

Section: The Evolution Of Financial Technologies and The Development mentioning

confidence: 99%

“…Journal of Innovation Management, 4 (4), рр. 32-54 6. Khraisha T., Arthur K. (2018) Can we have a general theory of financial innovation processes?…”

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confidence: 99%

Modernization of Structure of Financial Systems With the Development of Fintech

Lomachynska¹,

Ломачинська²,

Ломачинская³

2020

Scientific Approaches to Modernizing the Economic System: Vector of Development:

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“…It would be interesting also to investigate case studies of technological innovations collectively developed in settings where markets influencers are present. One potential candidate for empirical testing is the financial sector [34]. On the one hand, financial innovations are not usually protected by patents, thus making very likely that market participants observe and copy the innovations of others.…”

Section: Conclusion and Possible Extensionsmentioning

confidence: 99%

Network structure and optimal technological innovation

Khraisha¹,

Mantegna

2019

Journal of Complex Networks

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The role of networks in the development of technological innovation has attracted much theoretical and empirical attention. Yet much of the work has explored the role of undirected and homogeneous networks. In real cases many networks are directed. The flow of information, benefits or observations is directed from one node towards another node. Real networks are also heterogeneous: few nodes have high degree while many others have small degree. In this paper, we report on the results of an evolutionary agent based model in which a group of agents, in our case firms, collectively search a complex (rugged) technological landscape and observe each others solutions with different frequencies through different observation networks. Two groups of networks are considered in the analysis, the first group comprises undirected networks that vary in terms of efficiency while the second group comprises directed networks that vary in terms of homogeneity of node degree. We find that collective innovation (exploration of a technology landscape) improve average fitness over independent search because information about good innovations can diffuse faster through the network at an early stage. Moreover, we find that efficient networks outperform inefficient ones in the first stages of search, but some of the inefficient ones do marginally better in later stages. Finally, we find that degree-homogeneous and undirected networks achieve better fitness on average than heterogeneous and directed ones. We explain these results from the perspective of system-level technological innovation and in light of the theory of technological lock-in. We conclude by discussing implications for technological innovation and possible extensions.

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Can we have a general theory of financial innovation processes? A conceptual review

Cited by 47 publications

References 123 publications

Size, efficiency, market power, and economies of scale in the African banking sector

Size, efficiency, market power, and economies of scale in the African banking sector

Modernization of Structure of Financial Systems With the Development of Fintech

Network structure and optimal technological innovation

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