The literature on finance and innovation treats the relationship as monotone: more capital directed at innovative firms should raise long-run productivity growth. This paper shows why that need not hold. A Schumpeterian growth model is developed in which financiers screen heterogeneous candidate innovations before funding them, subject to a genuine cost-speed tradeoff: stricter screening raises the average quality of funded projects but slows the rate at which capital reaches the innovation frontier. The balanced-growth rate is a strictly concave, single-peaked function of screening intensity â an Allocation Frontier â with a technologically determined peak and a decentralized equilibrium that always falls strictly short of it, by an amount governed by the cost of screening relative to the value of getting it right. A calibration combining OECD productivity data, the markup literature, and an illustrative target for screening intensity finds this shortfall costs the calibrated economy roughly four percent of its attainable growth rate. Comparative statics further show that âmore innovation financeâ is not one thing: cheaper screening and greater entrant heterogeneity both raise growth by moving the economy toward its own frontier peak, while a larger raw flow of candidates raises growth by moving it away from an unchanging one.
Entrepreneurs typically seek financing in decentralized markets, where they approach investors sequentially. We develop a model of sequential capital markets with privately informed investors. The sequential market creates a dynamic adverse selection externality that leads to overinvestment and excessive rents to intermediaries, even as the number of competing investors becomes arbitrary large. The resulting rents lead to excessive entry of investors and insufficient entry of entrepreneurs. Moving to a centralized market structure or reducing transparency restores competitiveness but may harm efficiency. The model also explains how even a small skill advantage for an investor can lead to preferential deal flow and outsized returns.
Phi Dinh Hoang, Emmanuel L. C. VI M. Plan, Nga T. H. Nguyen
NFT market is nascent and thus prone to manipulative behavior. This paper examines the impact of wash trading on the relationships between NFT returns, volume, and volatility via Mixture of Distributions Hypothesis (MDH) and Sequential Information Arrival Hypothesis (SIAH), and the role of collection characteristics in these dynamics via Hedonic Pricing Theory (HPT). By comparing the full dataset and those devoid of cyclical wash trades, we find that MDH and SIAH hold across samples. Notably, the return-volatility relationship shifts from significantly negative to significantly positive post-cleaning, confirming that manipulative trades distort true market risk-return dynamics. In contrast, support for HPT weakens after applying stricter wash trade detection, suggesting collection features had overstated influence due to manipulation. These findings highlight the need for robust wash trading detection to ensure data reliability. Policymakers should consider ensuring market data reliability by enhancing transparency regulations around suspected wash trade transactions.
This study explores how national institutional environments shape entrepreneurial activity in the context of decentralized finance. Focusing on Initial Coin Offerings (ICOs), we use fuzzy-set Qualitative Comparative Analysis (fsQCA) on data from 2,709 ICOs across 42 countries to identify institutional configurations associated with high and low ICO activity. Drawing on institutional theory and heuristic-driven decision-making, we find that entrepreneurs and investors navigate uncertainty through diverse, context-specific institutional combinations. The findings contribute to entrepreneurship research by uncovering multiple pathways through which macro-level regulatory, cultural, financial, and technological conditions enable or constrain token-based fundraising across national ecosystems.
The present contribution explores â for the first time in economic literature â the monetary experiment called Luganoâs Plan âż and conducted by the City of Lugano (Switzerland) since March 2022 consisting of a public-private partnership with a global player in the stablecoin market such as Tether. In addition to stimulating a vivacious public debate about payment methods and fostering educational initiatives, the City of Lugano has created LVGA, a local payment token based on blockchain technology, which represents de facto a stablecoin pegged to the Swiss franc. The present case study provides further insights into the local experience of Lugano and might represent an example of âbest practicesâ to be further explored by the economic literature in the future.
This paper investigates the speed of price discovery when information becomes publicly available but requires costly processing to become common knowledge. We exploit the unique institutional setting of hacks on decentralized finance (DeFi) protocols. Public blockchain data provides the precise time a hackâs transactions are recordedâbecoming public informationâwhile subsequent social media disclosures mark the transition to common knowledge. This empirical design allows us to isolate the price impact occurring during the interval characterized by information asymmetry driven purely by differential processing capabilities. Our central empirical finding is that substantial price discovery precedes common knowledge: approximately 36 percent of the total 24-hour price decline (âŒ27 percent) materializes before the public announcement. This evidence suggests sophisticated traders rapidly exploit their ability to process complex, publicly available on-chain data, capturing informational rents. We develop a theoretical model of informed trading under processing costs which predicts strategic, slow information revelation, consistent with our empirical findings. Our results quantify the limits imposed by information processing costs on market efficiency, demonstrating that transparency alone does not guarantee immediate information incorporation into prices.
Non-Fungible Tokens (NFTs) are a developing area in the market of digital assets. NFTs represent digital or real-world items like artwork, gaming collectibles and real estate. We aim to study the daily working of NFT market and its interaction with cryptocurrency (Ether and Bitcoin) and search interest.Our approach involves identification of models encompassing both global and local feature importance. Various regression methods are utilized to determine the feature importance and select the predictive features effectively. Moreover, this study explores the relationship between search interest and weekly NFT sales and vice versa, to comprehend how public interest impacts the NFT market. Lastly, anomalies in daily sales are detected and analysed using STL Decomposition and SHAPely.The study reveals that intrinsic sales attributes and trade profits drive daily NFT sales, with positive sentiment significantly impacting Ethereum volatility and NFT sales. External factors like NFT supply, Ether price, and trade profits also influence anomalies. Positive sentiment significantly shapes crypto and NFT market dynamics.
EnglishThe bitcoin, one of the most discussed topics in recent years, is a virtual currency, with enormous potential, and can be used almost immediately without any intervention by financial institutions. The bitcoin has spread like wildfire in the last few years and all financial and governmental institutions have denounced the risk of its use for money laundering. The present paper focuses this aspect in order to understand if any purchases of bitcoins, with illicit money, can be sanctioned by the anti-money laundering criminal law. italianoIl bitcoin rappresenta uno dei fenomeni piu discussi degli ultimi anni. Si tratta di una moneta virtuale dalle potenzialita enormi, utilizzabile in maniera quasi istantanea, senza lâausilio di alcun istituto finanziario. Negli ultimi anni il bitcoin si e diffuso a macchia dâolio e tutte le istituzioni finanziarie e governative del pianeta hanno lanciato lâallarme sul rischio di un suo utilizzo a fini di riciclaggio. Il lavoro affronta questo aspetto, soprattutto al fine di comprendere se eventuali acquisti di bitcoin, con denaro di provenienza illecita, possano essere sanzionati dalla disciplina penalistica antiriciclaggio
A.V. Bogucharskov, I.E. Pokamestov, Karine Adamova, Zh. N. Tropina
The complexity of trade finance instruments associated with need for many accompanying documents, constant coordination are problems of this process.Successful development of trade finance instruments depend on improvement of software and implement blockchain solutions that enable companies to unite and through partnerships and process automation to accelerate cash flow and documentation throughout supply chain.The paper aims to examine areas and ways of blockchain application in trade finance and to identify key aspects of improving transactions process.We present possible interaction of participants with digital letters of credit and factoring with blockchain application and display its effect on key trade finance instruments.Moreover, we identifies a number of problems, implementation solutions of which will lead to further more efficient application of technology in supply chain finance.The achieving these goals will lead to further more effective application of blockchain in financing of supply chain.Blockchain with a high level of functionality and security in trade finance processes reduces processing time for documents, transaction costs, expanding number of participants and increases level of transparency.
. This paper looks at the role of tax decentralization in the Italian history of Public Finance from the beginning of the Italian Unification to the years before the set-up of Regional governments. The role of the benefit principles in the local tax assignments is discussed. The analysis also includes some updated data on local public expenditures and taxes from 1861 to 1970
Maria Ambrosanio, Paolo Balduzzi, Massimo Bordignon
For almost two decades, starting from the early â90s, Italy experienced the strongest wave of decentralization reforms in its post II World War history. The causes were both economic and political. Yet, in recent years, again economic and political causes seem to call for opposite reforms. Along with a second wave of scandals, this time interesting local politicians, the crisis that has hit our country since 2008 is having relevant effects on the relationships between central and local governments. The aim of this paper is to assess dimension and direction of these effects. We first review the situation of "fiscal federalism" in Italy before the crisis, summarizing the decentralization process in the â90s, its consequences in terms of financing and functions for local governments, the constitutional reform of 2001 and the implementation problems this created. We then look at the numbers of the crisis; the "double dip" of the economic cycle in the period 2007- 2013, the policies implemented to contrast the financial market confidence crisis and the distribution of the burden of the fiscal consolidation across levels of government. We also discuss the institutional features of the implemented policies, in particular referring to number of local governments and to the financial relationships between level of governments, including taxes, transfers, fiscal rules and bankruptcy procedurals. Finally, we look at the future: what consequences will the new European rules, as enshrined in the new art. 81, have on the financial relationships between levels of government? And how is the balance of power between the center and the periphery going to change in lieu of the new proposed Constitutional reform?
Feroz Ahmad Ahmad, Prashant Kumar, Gulshan Shrivastava, Med Salim Bouhlel
ON 12 JANUARY 2009 a pseudonymous entity signed a transaction that instructed a distributed network to transfer a small amount of digital currency to Hal Finney, one ofthe key figures of the cypherpunk movement. After a few minutes, the transaction was recorded on a distributed public ledger, permanently updating the balance ofbothparties. This transactionâ the first Bitcoin transactionâmarked the beginning of a new era of decentralized payment systems, ushering in a variety of financial Services that do not depend on any centralized clearinghouse or other financial middleman. Bitcoin is regarded by many as a powerful technological innovation that could disrupt many sectors, in the realm of finance and beyond. But the underlying technology on which the network operates, the Bitcoin blockchain can do much more than that. Just as the internet did in the early-1990s, blockchain technology carries with it a whole new range of promises concerning how decentralization can support and promote individual freedoms and autonomy. Blockchain proponents believe that Bitcoin and other cryptocurrency platforms will revolutionize mechanisms of value exchange in the same way that the internet transformed information sharing, by providing a platform for people to exchange digital resources, in a secure and decentralized manner without the need to rely on any intermediary or trusted authority. But this revolutionary potential also carries with it serious implications for censorship, intellectual property, and the regulated flow of information. A blockchain is a decentralized database of transactions maintained by a distributed network of computers, which all contribute to the verification and the validation of transactions. Once accepted, these transactions are recorded inside a âblockâ of transactions, which incorporates a reference to previous blocks. This creates a long chain of blocksâa âblockchainââthat stores the history of all transactions in a chronological order. Every block contains information about a particular set of transactions, a reference to the preceding block in the blockchain, and the answer to a complex mathematical puzzle that is used to validate the data associated with that block. A copy of the blockchain is stored on every computer in the network, making it virtually impossible for anyone unilaterally to modify the data stored on this decentralized database: if anyone tries to modify any transaction the fraud will be immediately detected by all other network participants.
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Blockchain Technology Applications and Security
Advanced Steganography and Watermarking Techniques
Abstract Italian cinema has often been a battle-ground between national government and local administrations. Since 1975 many laws have been passed in order to find a compromise between centralized control of filmic activities and a collective management that involving the State and local institutions. Despite the controversy, in the past two decades local administrations have become aware of the economic benefits from supporting film productions. Therefore they have been implementing film-friendly measures (film commissions, film funds, film incentives and tax revenues). At the same time the Ministero per i Beni e le AttivitĂ Culturali/Ministry for Cultural Heritage and Activities is reconsidering its mission by moving from financing films to becoming a promoter, financier and regulator of the Italian cinema industry as a whole. This article analyses how in the past 35 years the Italian state and regions have negotiated their powers regarding cinematographic activities. It also examines the development of film commissions and film funds introduced by local administrations for supporting film production. The final part of the article suggests that financing and regulation of film production in Italy is experiencing a decentralization process.
Numerous studies have been made of regional differences in income and level of development in Italy, and these studies basically differ in the responses they give to the question of whether the said differences were already of a substantial nature prior to Unification, or whether in fact they have widened since then. The present essay is going to examine this problem by focusing on the local administrative system adopted after Italian Unification, in order to ascertain the existence of a different approach to public intervention at the local level, and thus to the existence of disparities in local public spending. The paper offers an analysis of the actual working of the post-Unification administrative system in Italy, in terms both of the powers attributed to Italyâs municipalities and provinces, and of the degree of autonomy they had in deciding on funding methods. This analysis aims to ascertain whether the chosen strategy could have been maintained in a state characterized by strong regional differences, and to establish the kind of impact such a strategy had on the regional differences themselves. The main conclusion is that in absence of any sort of automatic transfer from the more industrialized regions to the poor ones, the adoption of a decentralized tax system for the financing of local public expenditure contributed to the deepening of regional divide. As a consequence at the beginning of the 19th century the central government started to subsidize the poorest regions and little by little move towards a more centralized fiscal system.