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Research Roundup for September 2020

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Welcome back to TPI’s Research Roundup, our semi-regular compilation of recent outside research of interest to tech policy nerds. The leaves are going to start to fall soon, the perfect time to read some economic research. If you’ve read a paper you think might be interesting to include in the next roundup, feel free to send it to nlovin@techpolicyinstitute.org

DISCLAIMER: The papers and authors are not affiliated with TPI. We do not necessarily agree with everything, or even anything, in these papers, but find them interesting and informative.

Virus Shook the Streaming Star by Jaeung Sim, Daegon Cho, Youngdeok Hwang, and Rahul Telang

What it is: A study of how COVID-19 has affected music streaming.

What they find: The number of plays of top 200 songs on Spotify fell as COVID-19 cases increased, and vice-versa. Streaming decreased up to 20% at peak in some countries, and decreased by around 10% over all. One explanation for this result is that people listen to music more when they are outside of their homes.

Why it matters: Understanding how media consumption changed with the pandemic helps to understand how media is consumed more generally and to think about how consumers will consume media in a “new normal” once the pandemic recedes.

Does Fintech Substitute for Banks? By Isil Erel and Jack Libersohn

What it is: A study of the impact of FinTech lending on Paycheck Project Program (PPP) loans.

What they find: Areas with fewer traditional banks have more PPP loans via FinTech lenders than areas with more traditional banks. FinTech lenders are also more prevalent in industries that had fewer SBA loans before COVID, possibly because those companies didn’t have the preexisting relationships with traditional banks. FinTech lending only partially substitutes for traditional lending, as areas with fewer traditional banks have fewer PPP loans than their economic situation would otherwise predict.

Why it matters: Understanding the relationship between traditional and online banking helps to plan policy towards FinTech and also understand how FinTech can expand access to finance.

Inequality in Household Adaption to Schooling Shocks by Andrew Bacher-Hicks, Joshua Goodman, and Christine Mulhern

What it is: An investigation of how online search data can predict socioeconomic gaps in at-home education during COVID?

What they find: While there are always more searches in wealthier areas for online educational resources, the post-COVID increase in searches for educational resources in increased by twice as much as did the same searches in poorer areas. 

Why it matters: Theses results suggests that COVID at-home learning will increase the education gap between students in rich and poor areas, and suggests work needs to be done in order to prevent the gap from growing during this period.

The Quality of Innovation “Booms” During “Busts” by Christos A. Makridis and Erin McGurie

What it is: A study of how innovation changes during economic recessions

What they find: While funding for research and development falls during recessions, patents produced during recessions receive more citations (a one percentage point increase in unemployment increases future citations by 0.35%, and a one percentage point decline in Real GDP Growth decreases future citations by 0.47%). Patent similarity measures are also lower, suggesting that the innovation occurring in recessions is more pioneering than the work done during expansions. One cause may be that firms are more willing to work on riskier projects because the opportunity cost of failure has fallen.

Why it matters: Understanding the dynamics of innovation during recessions has become more important as the world struggles to recover economically from the pandemic.