CrowdBerkeley: 3rd Annual Academic Symposium on Crowdfunding

CrowdBerkeley: 3rd Annual Academic Symposium on Crowdfunding

by | Sep 17, 2015 | Conferences, Events

Our ​3rd ​annual ​academic ​symposium ​on ​crowdfunding ​​will ​take ​a ​global ​look ​at ​the ​developing ​phenomena ​of ​social ​finance ​for ​SMEs ​and ​Innovation ​ ​- ​whether ​strictly ​“crowdfunding” ​or ​more ​broadly ​the ​application ​of ​social ​finance ​mechanisms ​including ​Peer-to-Peer ​lending, ​Peer-to-Business ​lending, ​and ​all ​other ​forms ​of ​crowdfunding ​and ​crowdfund ​investing. ​Since ​our ​2013 ​conference, ​the ​number ​of ​platforms ​has ​more ​than ​doubled, ​and ​despite ​significant ​delays ​in ​enacting ​rules ​to ​allow ​equity ​crowdfunding ​in ​the ​United ​States, ​many ​nations ​have ​adopted ​laws ​and ​rules ​to ​allow ​crowdfunding.

Link to symposium

Photo source: www.thedigitalfa.com

Type

Conferences

Location

100 Blum Hall

Date & Time

Sep 17-18, 2015

Website

none

Banking the Unbanked: A field experiment in Prize-linked Savings in Mexico

Banking the Unbanked: A field experiment in Prize-linked Savings in Mexico

by | Jul 1, 2015 | by Aisling Scott & Paul Gertler & Enrique Seira, Financial Globalization, Grant, Research

by Aisling Scott , Paul Gertler (Berkeley-Haas) and Enrique Seira (ITAM)

For a draft of the paper, see here.

This study randomized a temporary incentive of prize-linked savings (PLS) across bank branches in Mexico. A total of 110 branches were involved in the experiment, with 40 branches assigned the PLS treatment and 70 control branches. We demonstrate that PLS products serve as a nudge to open bank accounts and result in a 46% increase in bank account openings. Additionally, those opening accounts due to the lottery are significantly lower savers than their counterparts in the control branches. Furthermore, they keep their accounts open at similar rates and 36 percent use their accounts almost 5 years after the temporary incentive. We do not observe current account holders changing their average savings during the lottery.  Overall, we see effects on long-term savings for those who open accounts due to a short-term lottery incentives. Consequently, these lottery incentive (PLS) products could serve as an effective policy initiative to get individuals to open and learn to use savings accounts.

This grant funded us to obtaindata about those individual accounts opened during the lottery. We were able to show that those opening accounts during the lottery incentives turn out to be lower savers at the start, but over 36 percent of them still actively use their accounts five years later, which is the same rate as those in the control group. Consequently, the short-term lottery incentive has long-term effects for a percentage of people opening accounts.

Photo source: jameskaskade.com

Topics

Capital flows

Initiatives

Financial Globalization

Insider Trading Laws and Innovation

Insider Trading Laws and Innovation

by | Jul 1, 2015 | by Ross Levine; Chen Lin & Lai Wei, Financial Globalization, Grant, Research

by Ross Levine (Berkeley-Haas), Chen Lin and Lai Wei (CUHK Business School at the Chinese University of Hong Kong)

Link to paper.

Do legal restrictions on insider trading accelerate or slow technological innovation? Theory offers differing answers. Leland (1992) stresses that insider trading quickly reveals their information in public markets, improving stock price informativeness. Thus, restricting insider trading can hinder price discovery and reduce the efficiency of resource allocation among opaque activities such as innovation. Demsetz (1986) argues that for some firms, insider trading is an efficient way to compensate large owners for exerting corporate control. Thus, restricting insider trading can impede effective governance and investment. Other theories, however, highlight mechanisms through which restricting insider trading accelerates innovation. Fishman and Hagerty (1992) and DelMarzo et al. (1998) stress that restricting insider trading reduces the ability of corporate insiders to exploit other investors, which encourages those outside investors to expend resources assessing firms. This improves the valuation of difficult to assess activities, such innovation, and enhances investment.

Existing empirical evidence has not yet resolved these conflicting views. Indeed, researchers have not empirically assessed the overall impact of restricting insider trading on innovation.

In this paper, we offer the first study of whether restrictions on insider trading are associated with an overall increase or decrease in the rate of innovation. To conduct our study, we use the staggered enforcement of insider trading laws across 94 countries over the period from 1976 through 2006. To measure innovation, we construct six patent-based indicators. We obtain information on patenting activities at the industry level in 94 countries from 1976 through 2006 from the EPO Worldwide Patent Statistical Database (PATSTAT). We compile a sample of 76,321 country-industry-year observations and calculate the following proxies for technological innovation: (1) the number of patents to gauge the intensity of patenting activity, (2) the number of forward citations to patents filed in this country-industry-year to measure the impact of innovative activity, (3) the number of patents in a country-industry-year that become “top-ten” patents, i.e., patents that fall into the top 10% of citation distribution of all the patents in the same technology class in a year, to measure high-impact inventions, (4) the number of patenting entities to assess the scope of innovative activities, (5) the degree to which technology classes other than the one of the patent cite the patent to measure the generality of the invention, and (6) the degree to which the patent cites innovations in other technology classes to measure the originality of the invention.

We find that enforcing insider trading laws spurs innovation—as measured by patent intensity, scope, impact, generality, and originality. Consistent with theories that insider trading slows innovation by impeding the valuation of innovative activities, the relation between enforcing insider trading laws and innovation is larger in industries that are naturally innovative and opaque, and equity issuances also rise much more in these industries after a country enforces its insider trading laws.

 

Topics

Capital flows

Initiatives

Financial Globalization

Relationships in Over the Counter Markets

Relationships in Over the Counter Markets

by | Jul 1, 2015 | by Christine Parlour, Financial Globalization, Grant, Research

by Christine Parlour (Berkeley-Haas)

For a preliminary version of the paper, see here.

The size of over the counter (OTC) markets is enormous. As of April 30, 2015, the BIS estimated that the notional value outstanding of derivative contracts traded OTC to be 20,880 billion USD. Despite the importance of this market to practitioners, regulators and academics some aspects of its organization are not well understood.  This is because, the current paradigm to analyze OTC markets is based on search models. Recently, an empirical literature (focusing on the Municipal Bond market) has established that some OTC markets, when viewed as a network, have a core/periphery structure.  That is, a few dealers perform most of the transactions. These empirical results are inconsistent with search models. The premise of this project is that OTC markets are not search markets, but relationship markets. There will be two steps to this analysis. First, develop and analyze a clean model of customer intermediary interaction. Second, embed this in an industry-wide model in which intermediaries compete for customers.

Photo source: driverlayer.com

Topics

Capital flows

Initiatives

Financial Globalization

The Renminbi as Global or Regional Currency

The Renminbi as Global or Regional Currency

by | Jul 1, 2015 | by Barry Eichengreen & Domenico Lombardi, Financial Globalization, Grant, International Financial Architecture, Research

By Barry Eichengreen (UC Berkeley) & Domenico Lombardi (CIGI)

Link to paper, forthcoming in Asian Economic Papers.

The project, undertaken jointly with Domenico Lombardi of CIGI (Canada), sought to analyze the Chinese renminbi’s prospects as a global and regional currency, the question being whether the renminbi is more likely to play a consequential international role globally or within Asia.  To this end, the following aspects of renminbi internationalization were analyzed.

a)      The weight on the renminbi as an anchor currency in the exchange rate baskets of different countries, following the methodology pioneered by Frankel and Wei.

b)      The geographic distribution of People’s Bank of China renminbi swap lines, following the methodology of Garcia-Hererro et al.

c)       The timing of announcements designating official renminbi clearing banks for different foreign financial centers.

d)      The geographic distribution of QFI and QFII foreign investor renminbi quotas.

e)      The role of the renminbi in the IMF’s SDR basket and Asia’s Chiang Mai Initiative Multilateralization.

f)       The role of political linkages and alliances in the reserve-composition decisions of central banks and governments.

The analysis did not definitively determine whether the renminbi’s future was as a global or regional currency, but it identified factors and influences on which the outcome is likely to turn.

Research papers in this stream were presented in the 2015-6 academic year to seminars and conferences at UC Berkeley (Center for Chinese Studies), Stanford University (Center for Asian Studies), Harvard University, the University of Malaysia (Jeffrey Chia Institute), and the Korea Development Institute.

Link to paper, forthcoming in Asian Economic Papers.

 

Topics

Capital flows, Architecture

Initiatives

Financial Globalization, International Financial Architecture