nep-net New Economics Papers
on Network Economics
Issue of 2010‒07‒31
five papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Matching and network effects.. By Fafchamps, Marcel; Goyal, Sanjeev; Leij, Marco J. van der
  2. An organization that transmits opinion to newcomers By Juliette Rouchier; Paola Tubaro
  3. Rural banking By Nair, Ajai; Fissha, Azeb
  4. Econometric Models and the Evolution of Post-Offices Network By Boldron, François; Fève, Frédérique; Florens, Jean-Pierre; Panet-Amaro, C.; Valognes, C.
  5. The internationalization process of Italian fashion firms: the governance role of the founding team By Ernesto Tavoletti

  1. By: Fafchamps, Marcel; Goyal, Sanjeev; Leij, Marco J. van der
    Abstract: The matching of individuals in teams is a key element in the functioning of an economy. The network of social ties can potentially transmit important information on abilities and reputations and also help mitigate matching frictions by facilitating interactions among “screened” individuals. We conjecture that the probability of two individuals forming a team falls in the distance between the two individuals in the network of existing social ties. The objective of this paper is to empirically test this conjecture. We examine the formation of coauthor relations among economists over a twenty-year period. Our principal finding is that a new collaboration emerges faster among two researchers if they are “closer” in the existing coauthor network among economists. This proximity effect on collaboration is strong: Being at a network distance of 2 instead of 3, for instance, raises the probability of initiating a collaboration by 27%.
    JEL: D83 D85 C78
    Date: 2010
  2. By: Juliette Rouchier (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Paola Tubaro (Department of International Business and Economics - University of Greenwich)
    Abstract: We aim to identify the conditions under which social influence enables emergence of a shared opinion orientation among members of an organization over time, when membership is subject to continuous but partial turnover. We study an intra-organizational advice network that channels social influence over time, with a flow of joiners and leavers at regular intervals. We have been particularly inspired by a study of the Commercial Court of Paris, a judicial institution whose members are peer-elected businesspeople and are partly replaced every year. We develop an agent-based simulation of advice network evolution which incorporates a model of opinion dynamics based on a refinement of Deuant's relative agreement", combining opinion with a measure of "uncertainty" or openness to social influence. We focus on the effects on opinion of three factors, namely criteria for advisor selection, duration of membership in the organization, and new members' uncertainty. We show that criteria for interlocutor choice matter: a shared opinion is sustained over time if members select colleagues at least as experienced as themselves. Convergence of opinions appears in other congurations too, but the impact of initial opinion fades in time. Duration has an impact to the extent that the longer the time spent in the group, the stronger the possibility for convergence towards a common opinion. Finally, higher uncertainty reinforces convergence while lower uncertainty leads to coexistence of multiple opinions.
    Keywords: social influence, advice networks, intra-organizational networks, opinion dynamics, agent-based simulation
    Date: 2010–07–16
  3. By: Nair, Ajai; Fissha, Azeb
    Abstract: Before the late 1970s, rural dwellers in Ghana had almost no access to institutional credit for farm and nonfarm activities, and in many rural communities, secure, safe, and convenient savings and payment facilities hardly existed. In response to this situation, the Government of Ghana took several measures to increase access to credit in rural areas, including facilitating the establishment of rural and community banks (RCBs). This brief discusses the history of RCBs, their business model, their services, and their financial performance. It then draws some lessons relevant for others involved in or planning similar initiatives. As a network, RCBs are the largest providers of formal financial services in Ghana’s rural areas. By the end of 2008, Ghana had 127 RCBs with a total 584 service outlets, representing about half of the total banking outlets in the country. The RCB network reaches about 2.8 million depositors and 680,000 borrowers. Although the service delivery performance of the RCB network has been strong, its financial performance has been mixed. The profitability and net worth of the network have grown, but the financial performance of some members has been poor, and a small number are insolvent.
    Keywords: credit, Financial institutions, rural and community banks (RCBs), rural areas, rural banking, savings,
    Date: 2010
  4. By: Boldron, François; Fève, Frédérique; Florens, Jean-Pierre; Panet-Amaro, C.; Valognes, C.
    Date: 2010–06
  5. By: Ernesto Tavoletti (University of Macerata)
    Abstract: <div style="text-align: justify;">This study aims at exploring the process of internationalization in the Italian fashion firms, focusing on strategy-structure fit and the governance role of the founding team in providing such a fit. It does so with a single case study of a leading fashion firm. It suggests that classic deterministic theories about strategy-structure fit in growing firms offer poor guide. The strategy is entirely \emergent" and inspired by the specific talents of the founding team. Evidence confirms the causal link between strategy and structure: company structure is network based and evolves according to the emerging strategy. However, the development route does not follow any deterministic model: Uppsala's model of incremental and cognitive internationalisation, especially in its revisited and network based form, appears to be the more appropriate reference for the case, characterised by creative dynamics that are constantly evolving, following the vision and strategy that are constantly provided by the founding team.</div>
    Keywords: network,fashion industry,strategy,founding team,internationalisation,structure
    JEL: L20 L21 F23 M10
    Date: 2010–07

This nep-net issue is ©2010 by Yi-Nung Yang. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.