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on Network Economics |
| By: | Fariba Karimi; Matthias Raddant |
| Abstract: | We analyze cascades of defaults in an interbank loan market. The novel feature of this study is that the network structure and the size distribution of banks are derived from empirical data. We find that the ability of a defaulted institution to start a cascade depends on an interplay of shock size and connectivity. Further results indicate that the ability to limit default risk by spreading the lending to many counterparts decreased with the financial crisis. To evaluate the influence of the network structure on market stability, we compare the simulated cascades from the empirical network with results from different randomized network models. The results show that the empirical network has non-random features, which cannot be captured by rewired networks. The analysis also reveals that simulations assuming homogeneity for the size of banks and loan contracts dramatically overestimates the fragility of the interbank market |
| Keywords: | interbank loan Networks, systemic risk, cascades, null models |
| JEL: | G17 G01 E47 C15 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1872&r=net |
| By: | Bryan Kelly; Hanno Lustig; Stijn Van Nieuwerburgh |
| Abstract: | We propose a network model of firm volatility in which the customers’ growth rate shocks influence the growth rates of their suppliers, larger suppliers have more customers, and the strength of a customer-supplier link depends on the size of the customer firm. Even though all shocks are i.i.d., the network model produces firm-level volatility and size distribution dynamics that are consistent with the data. In the cross section, larger firms and firms with less concentrated customer networks display lower volatility. Over time, the volatilities of all firms co-move strongly, and their common factor is concentration of the economy-wide firm size distribution. Network effects are essential to explaining the joint evolution of the empirical firm size and firm volatility distributions. |
| JEL: | E1 G10 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19466&r=net |
| By: | Sarah Jacobson (Williams College); Jason Delaney (School of Business Administration, Georgia Gwinnett College) |
| Abstract: | Some policy problems pit the interests of one group against those of another group. One group may, for example, determine the provision of a project (such as a power plant or a dam) that benefits group members but has downstream externalities that hurt people outside the group. We introduce a model of projects with such asymmetries. In-group members may contribute to a common fund that benefits them as a public good. In the model, benefits from the project may or may not vary within the group. Project provision has negative downstream externalities: common fund contributions hurt agents outside the in-group (“Outsiders”) rendering common fund contributions anti-social overall. Many models of social preferences predict that such externalities should reduce or eliminate project provision, although conditional cooperation or a preference for in-group members may counteract this effect. We test this model with a lab experiment. With homogeneous in-group benefits, the presence of negative downstream externalities reduces contribution levels by nearly half. We introduce a rotating high-return position that allows subjects to trade favors. Contributions diminish only slightly with the introduction of the negative externality and reciprocal giving occurs whether or not Outsiders are present. |
| Keywords: | public bad, public good, social preferences, reciprocity, externalities, in-group-out-group, parochial altruism |
| JEL: | C91 D01 D62 D71 H41 Q50 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:wil:wileco:2013-09&r=net |
| By: | Balwant Singh Mehta |
| Abstract: | Abstract India did not participate in the landline phone revolution but has seen an unprecedented growth in mobile phones, with over 919 million subscribers by the end of March 2012, making it second only to China in this sphere. The tele-density in rural India, where nearly 69 percent of the total population lives, grew from below 1 percent in 2000 to around 40 percent in 2012. In these areas, people face several developmental constraints, such as low literacy, poor healthcare facilities, low per capita income, a high degree of poverty and problems related to poor infrastructure. Mobile phones can facilitate need-based and user-centric information and services at a cost that is affordable to India’s rural population, which was hitherto unreachable. Given this context, this study explores the socioeconomic impact of mobile phone usage in rural areas on the basis of a field survey conducted in two states of India: Punjab – a relatively developed state – and Bihar – a relatively underdeveloped state. The field survey revealed that mobile phones helped users gather information for both agricultural and non-agricultural purposes, as well as enabling them to keep in touch with their relatives and migrant family members. Mobile users benefit by obtaining timely information on a variety of subjects, including on employment opportunities and higher education for their children, by transferring funds and even by calling family members during emergencies. However, there is a marked difference in the usage of mobile phones among those in Punjab compared with those in Bihar. In developed areas, people were found to be early users of new technologies, reflected also in high usage of mobile value-added services (MVAS) and innovative uses like money transfer and agricultural information in Punjab. Meanwhile, a major and somewhat neglected dimension of mobile phone usage is that making communication substantially cheaper promotes social interaction. Multi-locational households with at least one migrant worker are increasing in numbers. Cheap mobile phones help such households keep in touch and remit money. Social relations can also cross traditional boundaries. The study also reveals that there are many innovations in the use of mobile phones, often carried out by users of different kinds, pointing to the importance of users in innovation processes. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:ctg-2013-29&r=net |
| By: | Ernest Miguelez (World Intellectual Property Organization, Economics and Statistics Division, Geneva, Switzerland) |
| Abstract: | The goal of this paper is to assess the influence of spatial mobility of knowledge workers on the formation of ties of scientific and industrial collaboration across European regions. Co-location has been traditionally invoked to ease formal collaboration between individuals and firms, since tie formation costs increase with physical distance between partners. In some instances, highly-skilled actors might become mobile and bridge regional networks across separate locations. This paper estimates a fixed effects logit model to ascertain precisely whether there exists a ‘previous co-location premium’ in the formation of networks across European regions. |
| Keywords: | inventors’ mobility, technological collaborations, co-location, European regions, panel data |
| JEL: | C8 J61 O31 O33 R0 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:wip:wpaper:07&r=net |
| By: | Cats, Oded (KTH); Koutsopoulos, Haris N. (KTH); Burghout, Wilco (KTH); Toledo, Tomer (Technion – Israel Institute of Technology) |
| Abstract: | Real-time information is increasingly being implemented in transit networks worldwide. The evaluation of the effect of real-time information requires dynamic modeling of transit operations and of passenger path choices. This paper presents a dynamic transit analysis and evaluation tool that represents time-tables, operation strategies, real-time information, adaptive passenger choices, and traffic dynamics at the network level. Transit path choices are modeled as a sequence of boarding, walking and alighting decisions that passengers undertake when carrying out their journey. The model is applied to the Metro network of Stockholm, Sweden area under various operating conditions and information provision scenarios, as a proof of concept. An analysis of the results indicates substantial path choice shifts and potential time savings associated with more comprehensive real-time information provision and transfer coordination improvements. |
| Keywords: | Real-time information; Public transport; Route choice; Simulation |
| JEL: | R40 |
| Date: | 2013–09–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2013_028&r=net |
| By: | Theresia Gunawan (Maastricht School of Management and Technical University of Eindhoven, the Netherlands); Jojo Jacob (United Nation University- Maastricht Economic and Social Research Institute on Innovation and Technology (UNU MERIT), the Netherlands); Geert Duysters (Tilburg University, the Netherlands) |
| Abstract: | This study investigates the role of intra-cluster ties, extra-cluster ties, and entrepreneurial orientation in shaping firms’ innovative performance. We conduct our analysis on a primary data set of 120 SMEs in the Cibaduyut footwear-manufacturing cluster, Indonesia. We find that extra-cluster ties mediate the relationship between proactiveness and innovative performance. A combination of high extra-cluster ties and risk taking exert a positive impact on innovative performance. Surprisingly, we find that risk taking negatively moderates the influence of intra-cluster ties on innovative performance. Overall, the findings of this study point to the synergistic effects of entrepreneurial orientation and extra-cluster ties on innovative performance. |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:msm:wpaper:2013/28&r=net |
| By: | Luca De Benedictis; Silvia Nenci; Gianluca Santoni; Lucia Tajoli; Claudio Vicarelli |
| Abstract: | In this paper we explore the BACI-CEPII database using Network Analysis. Starting from the visualization of the World Trade Network, we then define and describe the topology of the network, both in its binary version and in its weighted version, calculating and discussing some of the commonly used network's statistics. We finally discuss some specic topics that can be studied using Network Analysis and International Trade data, both at the aggregated and sectoral level. The analysis is done using multiple software (Stata, R, and Pajek). The scripts to replicate part of the analysis are included in the appendix, and can be used as an handson tutorial. Moreover,the World Trade Network local and global centrality measures, for the unweighted and the weighted version of the Network, calculated using the bilateral aggregate trade data for each country (178 in total) and each year (from 1995 to 2010,) can be downloaded from the CEPII webpage. |
| Keywords: | International Trade;Network Analysis;Density;Centrality;Stata;R;Pajek |
| JEL: | F10 F11 F14 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2013-24&r=net |
| By: | Tomoya Matsumoto (National Graduate Institute for Policy Studies) |
| Abstract: | We used a randomized control trial to measure how the free distribution of hybrid seeds and chemical fertilizers for maize production affected their adoption by small-scale farmers in the subsequent seasons. Information on their demand for the same inputs was collected through sales meetings which we organized in 2009 and 2011 where the inputs were actually sold. It revealed that the demand for the inputs of the free-input recipients was significantly higher in both 2009 and 2011 than that of non-recipients; that of the neighbors of the recipients fell in-between. The initial treatment assignment has a persistent influence on the farmers' demand over the two years whereas the difference between the free-input recipients and their neighbors has been reduced to some extent. The reduction of their gap in the application level of fertilizers is partly driven by social learning through information networks. However, there was no clear evidence of learning effects from peers on the demand for the hybrid seeds. One possible explanation of these mixed results is due to slow dissemination of the new inputs with low profitability. (JEL O13, O33, O55) |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:13-18&r=net |
| By: | Piotr Niewiadomski |
| Abstract: | Abstract This paper contributes to the international research project ‘Capturing the Gains: Economic and Social Upgrading in Global Production Networks and Trade’. Its main aim is to analyse the operations of international airlines in Africa and assess the influence of the international aviation industry on the development of tourism in selected African states. Simultaneously, through an exploration of the different ways in which international airline groups can foster the development of the tourism sector in Africa, the paper informs the general understanding of the influence of tourism on regional development. Although in general terms the paper focuses on the whole of Africa, more detailed issues are analysed on the basis of South Africa, Kenya and Uganda. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:ctg-2013-36&r=net |
| By: | Dev Nathan; Yang Fuquan; Yu Yin |
| Abstract: | Abstract This paper deals with the impact of competition on the tourism network in China. It identifies the supply and demand conditions among service providers, tour operators and tourists that have led to the zero-fee tour and then deals with the impact of this intense price competition in terms of the reduction in product quality and degrading of the whole network. The paper also deals with various attempts by local governments and others to curb the zero-fee tour. It points out that price restrictions have worked in a destination that has established a brand value and, thus, has become a differentiated product. In concluding, the paper deals with the supply reductions that are needed to reduce price competition in various segments of the tourism network. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:ctg-2013-28&r=net |
| By: | Michelle Christian; Francis Mwaura |
| Abstract: | Abstract Over the last decade, Uganda has re-emerged as a global tourism destination after years of instability. The growth of Uganda’s tourism global production network, however, is slow and is characterized by a few elite firms and highly controlled travel through tightly coordinated distribution channels. Capturing the Gains research asked how and if economic upgrading in the tourism global production network was happening in Uganda, and if social upgrading followed, by exploring one tourism location: Murchison Falls National Park. The findings suggest that tourism firms pursued vertical and horizontal economic upgrading strategies, but the social upgrading outcomes were mixed. Social upgrading for permanent workers followed economic upgrading for hotels and tourism service providers in Murchison Falls National Park, but not for community members outside the Park. Several aspects, such as the role of Uganda Wildlife Authority concessions, distribution access, and local labour market dynamics, are motivating factors in influencing upgrading dynamics. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:ctg-2013-19&r=net |
| By: | Dev Nathan; Sandip Sarkar |
| Abstract: | Abstract This paper deals with the role of innovation in upgrading within global production networks (GPNs). Because of the distribution of production segments across firms and countries, there is also a distribution of production knowledge. The paper looks at some ways of upgrading by developing economy firms – the roles of distributed knowledge, reverse innovation and new types of innovation, based on frugal engineering in emerging economies. Process changes could also be innovation, though, unlike product innovations, they are easily copied and spread. The paper points out the limits of current reverse innovation and also asks whether the separation of manufacturing from design has increased the speed of innovation. Before concluding, the paper looks at innovation in terms of the ‘adjacent possible’ in evolutionary analysis. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bwp:bwppap:ctg-2013-23&r=net |