Essays on the Economics of Energy Markets - Security of Supply and Greenhouse Gas Abatement

In summary, the presented thesis analyzes two distinct economic subjects: security of supply in natural gas markets and greenhouse gas abatement potentials in the residential heating market. These subjects considered both reflect key points in the triangle of energy policy and are both associated with transnational market failures within energy markets. The security of supply analyses in an intermeshed network are approached from a rather normative, top-down perspective of a social planner. On the contrary, the analyses of greenhouse gases emitted by households are positive analyses of consumer choices. The normative analyses of security of supply in natural gas markets and the positive analyses on greenhouse gas abatement in the residential heating market are organized in two parts of the thesis. 1. Normative analyses - Security of supply in natural gas markets: The two papers of the first part of the dissertation thesis are based on a normative approach with the European natural gas market and infrastructure model TIGER that allows for security of supply analyses. The general idea behind the modeling approach is based on the assumption of a social planner and finds an efficient utilization of the natural gas infrastructure. More precisely, the security of supply analyses conducted in the first part of the thesis refer to scenario simulations of disrupted supply routes in the European natural gas network. The effects of these security of supply scenarios on the usage of other infrastructure components, on marginal supply costs and disruptions to consumers are investigated. 2. Positive analyses of greenhouse gas abatement potentials - Econometric modeling of consumer choices and evaluation of public policies: The second part of the thesis includes two positive analyses which investigate household choices to derive greenhouse gas abatement potentials. In the residential heating market, the energy efficiency level exhibited and the type of energy carrier used are determined by investment decisions and significantly affect the level of greenhouse gas emissions. Major investment decisions of households concern investments in heating systems and in dwelling insulation. The investment decision of heterogenous households is not strictly driven by monetary objectives but also by non-monetary preferences. Hence, understanding household behavior is crucial for the development of targeted policies in greenhouse gas abatement. In the third paper of the thesis, micro-economic greenhouse gas abatement curves are derived theoretically and numerically by applying the dynamic microsimulation model (DIscrHEat) for the residential heating market, which integrates a discrete choice estimation of household behavior by using data on actual heating choices. The last paper is a panel data analysis of the effectiveness of subsidies on residential investments in energy efficiency and on energy consumption applying a differences-in-differences-in-differences approach

Blockchain Value Creation Logics and Financial Returns

With its complexities and portfolio-nature, the advent of blockchain technology presents several use cases to stakeholders for business value appropriation and financial gains. This 3-essay dissertation focuses on three exemplars and research approaches to understanding the value creation logics of blockchain technology for financial gains. The first essay is a conceptual piece that explores five main affordances of blockchain technology and how these can be actualized and assimilated for business value. Based on the analysis of literature findings, an Affordance-Experimentation-Actualization-Assimilation (AEAA) model is proposed. The model suggests five affordance-to-assimilation value chains and eight value interdependencies that firms can leverage to optimize their value creation and capture during blockchain technology implementation. The second essay empirically examines the financial returns of public firms\u27 blockchain adoption investments at the level of the three main blockchain archetypes (private-permissioned, public-permissioned and permissionless. Drawing upon Fichman\u27s model of the option value of innovative IT platform investments, the study examines business value creation through firm blockchain strategy (i.e., archetype instances, decentralization, and complementarity), learning (i.e., blockchain patents and event participation), and bandwagon effects using quarterly data of firm archetype investments from 2015 to 2020. The study\u27s propensity score matching utilization and fixed-effects modeling provide objective quantification of how blockchain adoption leads to increases in firm value (performance measured by Tobin\u27s q) at the archetype level (permissionless, public permissioned, and private permissioned). Surprisingly, a more decentralized archetype and a second different archetype implementation are associated with a lower Tobin\u27s q. In addition, IT-option proxy parameters such as blockchain patent originality, participation in blockchain events, and network externality positively impact firm performance, whereas the effect of blockchain patents is negative. As the foremost and more established use case of blockchain technology whose business value is accessed in either of the five affordances and exemplifies a permissionless archetype for financial gains, bitcoin cryptocurrency behavior is studied through the lens of opinion leaders on Twitter. The third essay this relationship understands the hourly price returns and volatility shocks that sentiments from opinion leaders generate and vice-versa. With a dynamic opinion leader identification strategy, lexicon and rule-based sentiment analytics, I extract sentiments of the top ten per cent bitcoin opinion leaders\u27 tweets. Controlling for various economic indices and contextual factors, the study estimates a vector autoregression model (VAR) and finds that finds that Bitcoin return granger cause Polarity but the influence of sentiment subjectivity is marginal and only stronger on bitcoin price volatility. Several key implications for blockchain practitioners and financial stakeholders and suggestions for future research are discussed

Technological change: An analysis of the diffusion and implications of e-business technologies

This is a monograph that presents both a comprehensive literature review and original research results on the diffusion and the implications of e-business technologies. The diffusion of e-business technologies among firms is regarded as part of the ongoing process of technological change and economic development. It is shown that increasing returns to adoption can arise if the technologies do not substitute each other in their functionalities, leading to an endogenous acceleration mechanism of technological development. Hence, the probability to adopt any e- business technology is hypothesized to be an increasing function of previously adopted, related technologies. Early mover advantages can exist until the early mover has exhausted all possibilities of the new technological paradigm that promise positive returns on investment. Thus, history matters for the technological development of a firm and adoption decision today affect the expected value of any other related technology in the future. The existence of the endogenous acceleration mechanism has important implications for the management of new technologies, the performance of enterprises, the development of market structures and entire economies. The theory is empirically tested and supported in four independent inquiries, using two different exceptionally large datasets and different econometric methods. The existence of a growing digital divide among companies is demonstrated for the period between 1994 and 2002. In addition, the adoption of new e-business technologies by firms creates opportunities to conduct innovation, either to reduce the costs for a given output, to create a new product or service, or to deliver products to customers in a way that is new to the enterprise. Hence, it is argued that the adoption of new technologies does have strategic relevance for firms. Empirical evidence is presented showing that e-business technologies are currently an important enabler of innovations. It is found that innovative firms are more likely to grow. Also, e-business related innovations are at the very least not inferior to traditional kinds of innovations in terms of simultaneous occurrence with superior financial performance of enterprises. The study takes an interdisciplinary approach by relating both to the economics and the management literature, with the objective to show complementarities between both research fields and to draw conclusions for both kinds of audiences.Technological change, innovation, diffusion, adoption, multiple related technologies, e-business, ICT, firm performance, endogenous acceleration, competitive advantage

Impacts of social networks, technology adoption and market participation on smallholder household welfare in Northern Ghana

Abstract Food insecurity remains a major challenge in many parts of sub-Saharan Africa, despite the increased access to improved agricultural technologies and markets in the past few decades. Several attempts have been made to understand the factors accounting for the low uptake of improved agricultural technologies and smallholder market engagement, and their implications on household income, food security and nutrition in the sub-region. Social networks have been recognized as playing important roles in influencing household production decisions in many developing countries. However, not much has been done, in the empirical literature, on how heterogeneities in social learning about both benefits and production techniques of improved technologies, social networks structures and smallholder market orientation affect smallholder production decisions and welfare. This study, therefore, contributes to these strands of literature by examining the role of social networks on smallholder adoption of improved soybean varieties, and the impacts of smallholder adoption and market orientation on household welfare in Northern Ghana. Specifically, the study first examines the impacts of peer adoption of two improved and competing soybean varieties on smallholders’ adoption decisions of these varieties using spatial autoregressive multinomial probit model to account for interdependence across varieties. Second, random-effects complementary log-log hazard model was used to investigate the role of social learning, network transitivity, centrality and modularity on the diffusion of these improved varieties. Third, the study examines the effects of own and peer adoption of the improved varieties on household soybean yield, food security and nutrition using the marginal treatment effects. It also explores the effects of policies that either increase affordability or access to improved seeds on adoption and the outcomes using the policy relevant treatment effects. Finally, the study employed an ordered probit selection model to examine the impacts of smallholder market-orientation on household food security and nutrition. The results show that a farmer’s adoption decision of a given improved variety is positively influenced by the adopting peers of this variety, but negatively by the adopting peers of the competing improved variety. Furthermore, when the relative share of adopting peers are equal, farmers are more likely to wait and not to switch from the old variety. In addition, the results show that both learning about benefits and production process are important in accelerating adoption, although the effects of learning about production process are higher when sufficient peers adopt the improved varieties. Also, the role of transitivity in the learning and diffusion processes is stronger, compared to centrality, although modularity tends to slow down the diffusion process, and also constrains the effects of both transitivity and centrality. The results further show that own and peer adoption of the improved varieties significantly increase smallholder yield and food consumption, and that adoption tend to make less endowed households to catchup with more endowed households. Similarly, policies that increase either affordability or accessibility significantly increase adoption, yield and consumption, but increasing accessibility appears to deliver somewhat higher food consumption than the affordability-oriented policies. The estimates also reveal substantial heterogeneity in consumption gains across market orientations and suggest the need for transition targeted and sensitive policies in promoting smallholder food security and nutrition through crop commercialization. Similarly, the findings on adoption suggest the need for policymakers to focus promotion efforts on demonstrating the relative benefits and production process of improved varieties to farmers. Also, interventions, such as self-help groups, farmer field-days and training workshops aimed at promoting smallholder interactions, and enhancing exchange can increase the effectiveness of social networks in promoting adoption and household welfare

The diffusion of process innovation in the UK financial sector: an empirical analysis of automated teller machine (ATM) diffusion

Recent policy initiatives have identified that the diffusion of innovation constitutes an important component in technical change and progress and is the impetus behind changes in firm productivity. To date, however, the main emphasis of economists has been on the diffusion of process innovations in the industrial sector with diffusion in the financial sector either ignored or, at best, summarised by a number of stylised facts relating to the spread of information. The objective of this thesis is to explore the inter-firm determinants of ATM adoption and diffusion in the UK financial sector and identify firm-specific and market factors in the diffusion process. The empirical analysis draws on duration analysis which represents the current state-of-art modelling approach to inter-firm diffusion. This approach conceptualises inter-firm diffusion as a cross-section of durations of nonadoption from which, most importantly, hypothesised factors (or `covariates') can be examined by their significance or otherwise on the conditional probability of adoption. The main findings of this thesis support the stylised fact often made in the diffusion literature that the inter-firm diffusion curve is sigmoid and characterised by a nonmonotonic hazard function. Furthermore the empirical analysis supports the hypothesis that firm-specific characteristics and expectations have played a crucial role in the interfirm diffusion of ATMs. In addition, the results indicate that the diffusion of ATMs in the UK has been characterised by the existence of positive network externalities. The results are also shown to be robust across a number of model specifications and assumptions concerning the time-path of covariates

Book of abstracts of the 24th Euro Working Group on Transportation Meeting

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