This paper examines the possible impact on innovation involving payment cards as a result of price caps that lead to the drastic reduction in interchange fees. Such reductions invert the traditional business model for the payments card industry from a merchant-pays model to a consumer-pays...

Open banking (OB) empowers bank customers to share transaction data with fintechs and other banks. 49 countries have adopted OB policies. Consumer trust in fintechs predicts OB policy adoption and adoption spurs investment in fintechs. UK microdata shows that OB enables: i) consumers to access...

This paper presents new evidence on the relationship between competition and innovation by extending previous literature from manufacturing to financial services. We introduce a new measure of overall innovation by estimating and enveloping annual minimum cost frontiers to create a global...

In this paper we estimate, using stochastic frontier estimation techniques, the relationship between R&D inputs a innovative output in a sample of Dutch firms. We find that over 63% of between firm variation in observed "innovativeness" can be attributed to inefficiency in the innovation...

This paper contains an empirical dynamic model of supply and demand in the market for digital cameras with endogenous product innovation. On the demand side, heterogeneous consumers time optimally the purchase of goods depending on the expected evolution of prices and characteristics of...

This paper classifies innovation as quality-improving or cost-reducing and estimates a dynamic model incorporating firm export, quality innovation, and cost innovation decisions. Estimation results show that export, quality innovation, and cost innovation increase next-period firm productivity...

Digital technologies and fintech firms have rapidly reshaped the consumer financial landscape in recent years, and have the potential to help consumers make better decisions and improve their financial health. Existing technologies such as autopay are also experiencing increased takeup, a trend...

We analyze the impact of interchange fees on consumers' and merchants' incentives to adopt an innovative payment instrument, in a setting where there are adoption externalities between consumers and merchants. We show that consumer adoption decreases with the interchange fee for high degrees of...