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on Network Economics |
| By: | Fabio Caccioli; J. Doyne Farmer; Nick Foti; Daniel Rockmore |
| Abstract: | In spite of the growing theoretical literature on cascades of failures in interbank lending networks, empirical results seem to suggest that networks of direct exposures are not the major channel of financial contagion. In this paper we show that networks of interbank exposures can however significantly amplify contagion due to overlapping portfolios. To illustrate this point, we consider the case of the Austrian interbank network and perform stress tests on it according to different protocols. We consider in particular contagion due to (i) counterparty loss; (ii) roll-over risk; and (iii) overlapping portfolios. We find that the average number of bankruptcies caused by counterparty loss and roll-over risk is fairly small if these contagion mechanisms are considered in isolation. Once portfolio overlaps are also accounted for, however, we observe that the network of direct interbank exposures significantly contributes to systemic risk. |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1306.3704&r=net |
| By: | Krogmann, Yin; Riedel, Nadine; Schwalbe, Ulrich |
| Abstract: | This paper analyses the inter-firm R&D network formed in the pharmaceutical biotechnology industry during the 1990s from different perspectives: theoretical network formation, firm's structural positions and its collaborations at the entire network level, and the determinants for firm's centrality-based partnering capability. The results indicate that pharmaceutical biotechnology industry has experienced a significant evolutional change in size and structure during 1991-1998. By considering individual structural positions, the descriptive statistics show that in the 1990s, established pharmaceutical companies developed into dominant star players with multiple partnerships while holding central roles in the R&D network. In the network analysis that emphasized aggregate network level, the degree-based and betweenness-based network centralization were not high implying that the distribution of overall positional advantages in the pharmaceutical biotechnology industry is, to a large degree, not unequal and even though most firms in this sector are linked to the R&D network, some of them are more active than others. The current analysis also shows that firm's efficiency, firm's dependency on its complementary resources and firm's experiences at managing partnerships are important determinants for firm's centrality-based partnering capability, which has important managerial implications for understanding firm's strategic partnering behaviour. -- |
| Keywords: | Inter-firm cooperation,R&D partnerships,Network formation,Social network analysis,Instrumental variable |
| JEL: | C12 C36 D85 L24 L65 O32 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fziddp:752013&r=net |
| By: | S. Usai; E. Marrocu; R. Paci |
| Abstract: | Building on previous literature providing extensive evidence on flows of knowledge generated by inter-firm agreements, in this paper we aim to analyse how the occurrence of such collaborations is driven by the multi-dimensional proximity among participants and by their position within firms’ network. More specifically, we assess how the likelihood that two firms set up a partnership is influenced by their bilateral geographical, technological, organizational, institutional and social proximity and by their position within networks in terms of centrality and closeness. Our analysis is based on agreements in the form of joint ventures or strategic alliances, announced over the period 2005-2012, in which at least one partner is localised in Italy. We consider the full range of economic activities and this allow us to offer a general scenario and to specifically investigate the role of technological relatedness across different sectors. The econometric analysis, based on the logistic framework for rare events, yielded three noteworthy results. First, all the five dimensions of proximity jointly exert a positive and relevant effect in determining the probability of inter-firm knowledge exchanges, signalling that they are complementary rather than substitute channels. Second, the higher impact on probability is due to the technological proximity, followed by the geographical one, while the other proximities (social, institutional and organizational) have a limited effect. Third, we find evidence on the positive role played by networks, through preferential attachment and transitivity effects, in enhancing the probability of inter-firm agreements. |
| Keywords: | joint ventures, knowledge flows, networks, proximities, strategic alliances |
| JEL: | R12 O33 O31 L14 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201311&r=net |
| By: | Theophilos Papadimitriou; Periklis Gogas; Benjamin M. Tabak |
| Abstract: | Comprehensive and thorough supervision of all banking institutions under a Central Bank’s regulatory control has become necessary as recent banking crises show. Promptly identifying bank distress and contagion issues is of great importance to the regulators. This paper proposes a methodology that can be used additionally to the standard methods of bank supervision or the new ones proposed to be implemented. By this, one can reveal the degree of banks’ connectedness and thus identify “core” instead of just “big” banks. Core banks are central in the network in the sense that they are shown to be crucial for network supervision. Core banks can be used as gauges of bank distress over a sub-network and promptly raise a red flag so that the central bank can effectively and swiftly focus on the corresponding neighborhood of financial institutions. In this paper we demonstrated the proposed scheme using as an example the asset returns variable. The method may and should be used with alternative variables as well. |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:bcb:wpaper:306&r=net |
| By: | Sebastian M. Krause; Tiago P. Peixoto; Stefan Bornholdt |
| Abstract: | We introduce a model for the adaptive evolution of a network of company ownerships. In a recent work it has been shown that the empirical global network of corporate control is marked by a central, tightly connected "core" made of a small number of large companies which control a significant part of the global economy. Here we show how a simple, adaptive "rich get richer" dynamics can account for this characteristic, which incorporates the increased buying power of more influential companies, and in turn results in even higher control. We conclude that this kind of centralized structure can emerge without it being an explicit goal of these companies, or as a result of a well-organized strategy. |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1306.3422&r=net |
| By: | Dunham, Gabriel; Uchida, Emi; Uchida, Hirotsugu |
| Abstract: | The benefits from increased levels of social capital have been shown to manifest themselves in ways that can increase the efficiency of the use and regulation of natural resources, as well as increase the resiliency of resource dependent communities against fluctuations in abundance. While the literature shows ample evidence of the positive effects that social capital can have on management and stakeholder institutions, few studies examine the effects of changes in management on levels of social capital in commercial fisheries. This study employs network and econometric analyses to examine social capital in the Northeast multispecies groundfish fishery. We compare alternative measurements of social capital, and find suggestive evidence of decreased levels of social capital associated with a recent change from effort-based to rights-based management. Increased knowledge of this relationship may provide tangible benefits to both management institutions and resource users. |
| Keywords: | Farm Management, Labor and Human Capital, Resource /Energy Economics and Policy, fisheries, groundfish, information sharing, networks, sector management, social capital, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150297&r=net |
| By: | Tiwari, Ashutosh; Richards, Timothy J. |
| Abstract: | We compare the effect of anonymous social network ratings (Yelp.com) and peer group recommendations on restaurant demand. We conduct a two stage choice experiment and combine it with online social network reviews from Yelp.com and find that peers have a stronger impact on restaurant demand than anonymous reviewers. |
| Keywords: | Peer Networks, Anonymous Networks, Economic Experiment, Social Dining, Community/Rural/Urban Development, Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Institutional and Behavioral Economics, |
| Date: | 2013–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150467&r=net |
| By: | Dillon, Andrew |
| Abstract: | Malnutrition and micronutrient deficiencies such as anemia have well-documented consequences on children’s health and schooling, cognitive functioning, and long term economic returns. This paper addresses the potential role of mother’s knowledge on reducing malnutrition and micronutrient deficiencies drawing on the social networks literature to better understand the role of knowledge provider characteristics and social network structure have on knowledge diffusion. A cluster randomized control trial was implemented to test an agricultural production and nutrition education program, targeted to mothers of children aged 3-12 months at baseline living across four districts in Gourma province, Burkina Faso. Villages were randomly assigned to either the control group or to one of two treatment groups based on knowledge provider characteristics. Both treatment groups participated in a two-year program that included homestead food production, aimed to increase production of high quality foods, and a nutrition information component, aimed to improve knowledge and adoption of optimal infant and young child feeding (IYCF) practices. The two treatment groups differed in the actors who delivered the nutrition information messages, either older women leaders (OWL villages) or village health committee members (HC villages). This paper investigates the role that the nutrition information delivery strategy and social networks play in diffusing nutrition information among young mothers. The diffusion strategy may affect the young mother’s confidence in and retention of new nutritional information, while social network structure may reinforce nutritional messages through peer effects. We find IYCF knowledge diffusion is higher in HC villages relative to OWL villages, while social network measures, degree and betweeness, have statistically significant, but smaller effects on certain categories of IYCF knowledge. The increased knowledge effects explain one of the causal pathways through which the intervention has an impact on childhood anemia (26% of a standard deviation) in the HC treatment, but not the OWL treatment. |
| Keywords: | Consumer/Household Economics, Food Consumption/Nutrition/Food Safety, Health Economics and Policy, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150524&r=net |
| By: | Magnan, Nicholas; Spielman, David J.; Gulati, Kajal |
| Abstract: | Despite evidence of the importance of differences in the source and type of information that women and men acquire, there is a persistent assumption that these gender dimensions of information acquisition are irrelevant to decision-making in cereal systems in South Asia. Yet women do play a fundamental role in many agricultural decisions and thus have a stake in the choice of technologies selected by the household. The paper attempts to understand women’s involvement in agricultural female networks and if they learn about a new agricultural technology, laser land leveling, through their social networks. Further, the study analyzes whether these female network effects have any influence on household demand for the new technology. Data for this study was collected as part of a research project on laser land leveling in 24 villages drawn randomly from three districts of eastern Uttar Pradesh, India. A binding experimental auction was conducted to elicit demand for a new technology, laser land leveling (LLL), with a randomly selected group of farmers, of which 80 percent were male household heads. The study finds evidence that factors that shape farmers’ wives networks are very different from those that shape links between their husbands. Overall, women who are poorer and less educated tend to have more agricultural information contacts than wealthier and more educated women. We find that if a wife has an adopting wife in her network, her husband bid Rs. 81 more in the auction than if she did not. While we cannot say that the network effect through the wives is stronger, we can say there is evidence that there are separate and significant male and female network effects. |
| Keywords: | Institutional and Behavioral Economics, International Development, International Relations/Trade, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150688&r=net |
| By: | Hassink, Wolter (Utrecht University); van Leeuwen, Bas (Utrecht University) |
| Abstract: | Many studies indicate that human height is determined largely by childhood circumstances, which in turn influences an adult's labor market opportunities. The aim of this note is to test this thesis by examining the correlation between childhood circumstances and labor market outcomes on the one hand, and heights on the other, when networks are included as proxied by surnames. The fact that, after the inclusion of this surname proxy, we find a correlation only between height and labor market outcomes suggests that, while childhood circumstances affect height largely via social status and networks as captured by surnames, the same does not apply for labor market outcomes. |
| Keywords: | stature, networks, Indonesia |
| JEL: | J01 N35 Z13 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7433&r=net |
| By: | Boucher, Steve; Delpierre, Matthieu |
| Keywords: | Farm Management, Risk and Uncertainty, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea13:150440&r=net |