nep-net New Economics Papers
on Network Economics
Issue of 2011‒10‒22
nine papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. Risk and Reciprocity Over the Mobile Phone Network: Evidence from Rwanda By Joshua Blumenstock; Nathan Eagle; Marcel Fafchamps
  2. Knowledge Flows and Capability Building in the Indian IT Sector: A Comparative Analysis of Cluster and Non-Cluster Locations By Basant, Rakesh; Chandra, Pankaj; Upadhyayula Rajesh
  3. Congestion Management in European Power Networks: Criteria to Assess the Available Options By Karsten Neuhoff; Benjamin F. Hobbs; David Newbery
  4. Small worlds and board interlocking in Brazil: a longitudinal study of corporate networks, 1997-2007 By Mendes-Da-Silva, Wesley
  5. Environmental innovations, local networks and internationalization By Giulio Cainelli; Massimiliano Mazzanti; Sandro Montresor
  6. The role of reciprocation in social network formation, with an application to blogging By Gaudeul, Alexia; Giannetti, Caterina
  7. Bowling alone but tweeting together: the evolution of human interaction in the social networking era By Antoci, Angelo; Sabatini, Fabio; Sodini, Mauro
  8. Distinguishing manipulated stocks via trading network analysis By Xiao-Qian Sun; Xue-Qi Cheng; Hua-Wei Shen; Zhao-Yang Wang
  9. Communautés d'affaires et réseaux sociaux : facteur de développement pour l'internationalisation des entreprises ? : Cas des entrepreneurs de PME françaises en Chine. By Goxe, François

  1. By: Joshua Blumenstock; Nathan Eagle; Marcel Fafchamps
    Abstract: A large literature describes how local risk sharing networks can help individuals smooth consumption in the face of idiosyncratic economic shocks. However, when an entire community faces a large covariate shock, and when the transaction costs of transfers are high, these risk sharing networks are likely to be less effective. In this paper, we document how a new technology – mobile phones – reduces transaction costs and enables Rwandans to share risk quickly over long distances. We examine a comprehensive database of person-to-person transfers of mobile airtime and find that individuals send this rudimentary form of “mobile money” to friends and family affected by natural disasters. Using the Lake Kivu earthquake of 2008 to identify the effect of a large covariate shock on interpersonal transfers, we estimate that a current-day earthquake would result in the transfer of between $22,000 and $30,000 to individuals living near the epicenter. We further show that the pattern of transfers is most consistent with a model of reciprocal risk sharing, where transfers are determined by past reciprocity and geographical proximity, rather than one of pure charity or altruism, in which transfers would be expected to be increasing in the wealth of the sender and decreasing in the wealth of the recipient.
    Keywords: Risk Sharing; Mobile Phones; Mobile Money; Information and communications technologies; Development; Earthquakes; Rwanda; Africa.
    JEL: O16 O17 O33
    Date: 2011
  2. By: Basant, Rakesh; Chandra, Pankaj; Upadhyayula Rajesh
    Abstract: The role of industrial clusters in the industrialization of many emerging economies continues to dominate the debate among policy makers and researchers worldwide. While recent discussions on this debate have focused on knowledge spillovers among participants within clusters, knowledge flows between non local networks and the cluster actors have not been accorded due attention in the literature. Further, the literature does not compare the relative impact of knowledge flows among firms within clusters and firms outside clusters. In this study, we attempt a comparative analysis of the role of knowledge flows in capability formation among firms in the Indian Information Technology sector (IT sector) across cluster and non-cluster locations. The empirical results suggest that at the firm level, leveraging of capabilities to enhance performance and networks to build capabilities is not automatic; structural features of the firms’ location enable this transformation. Moreover, while capabilities affect performance of firms positively only in clusters, economies of scale and some strategies like quality certification used by firms impact performance of firms outside clusters. Interestingly, although economies of scale do not impact the performance of firms within clusters, they do, however affect the capability formation of firms within clusters only. Further, we found that local and national non-customer networks affect capability formation of firms within and outside clusters whereas international customer networks affect capability formation of firms within clusters only. These have implications for how firms can develop appropriate strategies to enhance their performance.
    Keywords: Industrial Clustering, Information Technology industry, Networks, Capabilities
  3. By: Karsten Neuhoff; Benjamin F. Hobbs; David Newbery
    Abstract: EU Member States are pursuing large scale investment in renewable generation in order to meet a 2020 target to source 20% of total energy sources by renewables. As the location for this new generation differs from the location of existing generation sources, and is often on the extremities of the electricity network, it will create new flow patterns and transmission needs. While congestion exists between European countries, increasing the penetration of variable sources of energy will change the current cross-border congestion profile. It becomes increasingly important for the power market design to foster the full use of existing transmission capacity and allow for robust operation even in the presence of system congestion. After identifying five criteria that an effective congestion management scheme for European countries will need, this paper critically assess to what extent the various approaches satisfy the requirements.
    Keywords: Power market design, integrating renewables, congestion management
    Date: 2011
  4. By: Mendes-Da-Silva, Wesley
    Abstract: Social Network Analysis (SNA) is an emerging research field in finance, above all in Brazil. This work is pioneering in that it is supported by reference to different areas of knowledge: social network analysis and corporate governance, for dealing with a similarly emerging topic in finance; interlocking boards, the purpose being to check the validity of the small-world model in the Brazilian capital market, and the existence of associations between the positioning of the firm in the network of corporate relationships and its worth. To do so official data relating to more than 400 companies listed in Brazil between 1997 and 2007 were used. The main results obtained suggest that the configuration of the networks of relationships between board members and companies reflects the small-world model. Furthermore, there seems to be a significant relationship between the firm’s centrality and its worth, described according to an “inverted U” curve, which suggests the existence of optimum values of social prominence in the corporate network.
    Keywords: Board Interlocking; Social Network Analysis in Finance; Company Boards
    JEL: L14 G3
    Date: 2011–10–15
  5. By: Giulio Cainelli; Massimiliano Mazzanti; Sandro Montresor
    Abstract: This paper investigates the drivers of the environmental innovations (EI) introduced by firms in local production systems (LPS). The role of firm network relationships, agglomeration economies and internationalization strategies is analysed for a sample of 555 firms in the Emilia-Romagna region, North-East of Italy. Cooperating with 'qualified' local actors - i.e. universities and suppliers - is the most important driver of EI for most firms, along with their training policies and IT innovations. The role of agglomeration economies is less clear and seems to depend on the EI propensity of more locally oriented firms playing in industrial district areas, which might even turn agglomeration economies into dis-economies. Networking effects and agglomeration economies are instead found to strongly promote the adoption of EI by multinational firms, thus highlighting the importance of local-global interactions. We provide some interesting findings for particular kinds of challenging EI in such fields as CO2 abatement and ISO labelling, generally extending the analysis of EI drivers by joining local and international factors.
    Keywords: Eco-innovation, foreign ownership, networking, district, agglomeration economics, local production systems
    JEL: C21 L60 O13 O30 Q20 Q58 F23
    Date: 2011
  6. By: Gaudeul, Alexia; Giannetti, Caterina
    Abstract: This paper deals with the role of reciprocation in the formation of individuals' social networks. We follow the activity of a panel of bloggers over more than a year and investigate the extent to which initiating a relation brings about its reciprocation. We adapt a standard capital investment model to study how reciprocation affects the build-up of the individual social capital of bloggers, as measured by their links and interactions with others. This allows us to measure the role of content production and relationship building in the dynamics of online social networks and to distinguish between the social networking and media aspects of blogging.
    Keywords: Blogs; Friendship; LiveJournal; Reciprocation; Social Capital; Social Networks
    JEL: L82 Z13 C33 D85
    Date: 2011–10–13
  7. By: Antoci, Angelo; Sabatini, Fabio; Sodini, Mauro
    Abstract: The objective of this paper is to theoretically analyze how human interaction may evolve in a world characterized by the explosion of online networking and other Web-mediated ways of building and nurturing relationships. The analysis shows that online networking yields a storage mechanism through which any individual contribution - e.g. a blog post, a comment, or a photo - is stored within a particular network and ready for virtual access by each member who connects to the network. When someone provides feedback, for example by commenting on a note, or by replying to a message, the interaction is finalized. These interactions are asynchronous, i.e. they allow individuals to relate in different moments, whenever they have time to. When the social environment is poor of participation opportunities and/or the pressure on time increases (for example due to the need to increase the working time), the stock of information and ties stored in the Internet can help individuals to defend their sociability.
    Keywords: Internet; computer-mediated communication; online networking; Facebook; social networks; social capital
    JEL: O33 D83 Z13 D85
    Date: 2011–10–21
  8. By: Xiao-Qian Sun; Xue-Qi Cheng; Hua-Wei Shen; Zhao-Yang Wang
    Abstract: Manipulation is an important issue for both developed and emerging stock markets. For the study of manipulation, it is critical to analyze investor behavior in the stock market. In this paper, an analysis of the full transaction records of over a hundred stocks in a one-year period is conducted. For each stock, a trading network is constructed to characterize the relations among its investors. In trading networks, nodes represent investors and a directed link connects a stock seller to a buyer with the total trade size as the weight of the link, and the node strength is the sum of all edge weights of a node. For all these trading networks, we find that the node degree and node strength both have tails following a power-law distribution. Compared with non-manipulated stocks, manipulated stocks have a high lower bound of the power-law tail, a high average degree of the trading network and a low correlation between the price return and the seller-buyer ratio. These findings may help us to detect manipulated stocks.
    Date: 2011–10
  9. By: Goxe, François
    Abstract: Les concepts d' « internationalisation » et de « réseaux » sont l'objet d'un grand nombre de travaux en gestion sans pour autant qu'un consensus ne s'établisse quant à leurs définitions respectives ou à leurs interactions réciproques. D'après une analyse des littératures relatives à ces concepts, nous proposons une lecture du développement international comme un processus entrepreneurial conduit par un individu grâce notamment à la mobilisation de « réseaux » personnels et se traduisant par une tentative de passage d'un champ social à un autre. Cette grille de lecture conceptuelle est opérationnalisée et appliquée aux cas empiriques d'entrepreneurs de PME françaises tentant de se développer en Chine. Nous analysons les efforts d'internationalisation de ces entrepreneurs comme passage d'un champ à un autre au travers des caractéristiques personnelles des individus (capital de l'entrepreneur), de plusieurs dimensions résiliaires et des résultats concrètement obtenus. Nous discutons finalement des implications, notamment les caractéristiques des entrepreneurs internationaux, des logiques et divisions sociales entre acteurs du développement international et leur impact sur l'internationalisation ainsi que certaines réflexions quant aux structures d'accompagnement international.
    Abstract: Although the concepts of « internationalization » and « networks » have attracted considerable attention from researchers in management, no consensus has yet been reached as to their respective definitions or reciprocal interactions. Based on an analysis of extant literature on these concepts, we offer to consider internationalization as an entrepreneurial process led by an individual mobilizing personal « networks » and a passage from one social field to another. This conceptual framework is operationalized and applied to the empirical cases of French SME entrepreneurs approaching China. We analyze entrepreneurs' internationalization efforts as a passage from one field to another through individuals' characteristics (entrepreneur's capital), various network dimensions and concrete results obtained. We eventually discuss the research implications including international entrepreneurs' characteristics, social dynamics and divisions among international development actors, their impact upon internationalization along with some practical implications for international development agencies.
    Keywords: China; case study; Social capital; Networks; Entrepreneurship; internationalization; Chine; étude de cas; Bourdieu; réseaux; entrepreneuriat; internationalisation; Capital social;
    JEL: L14 L26 Z13
    Date: 2011–06

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