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on Network Economics |
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Issue of 2016‒12‒18
six papers chosen by Pedro CL Souza Pontifícia Universidade Católica do Rio de Janeiro |
| By: | Stephen L. Ross (University of Connecticut); Zhentao Shi (Chinese University of Hong Kong) |
| Abstract: | Studies that can distinguish between exogenous and endogenous peer effects of social interactions are relatively rare. One recent identification strategy exploits partial overlapping groups of peers. If a student has two groups of separated peers, the peer choices are correlated through that specific student's choice, but one group's attributes are assumed to directly influence neither the other peer group's attributes nor the choices. In the context of academic performance in higher education, however, the evidence of peer effects on academic outcomes has been mixed, creating a potential for weak instruments. We utilize a period of transition when students were being reassigned to dormitories from a new campus to an old campus. Many groups of roommates were broken up at the end of freshman year, and then combined with other groups of students from the same school in the sophomore year. We find reduced-form evidence that information about a student's previous year roommates can explain the current test scores of their new roommates. However, due to weak instruments, the estimated endogenous effects appear unreasonably large. We draw on weak-IV robust tests, namely the Anderson-Rubin-type S-test (Stock and Wright, 2000) and Kleibergen's Lagrangian multiplier test (Kleibergen, 2005), to provide properly-sized tests for the endogenous effects between the test scores of current roommates and to calculate lower bounds of such effects. These tests strongly reject the null hypothesis of no endogenous effects. |
| Keywords: | academic performance, hypothesis testing, endogenous peer effects, random assignment, weak instruments |
| JEL: | C26 C51 I23 J00 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:hka:wpaper:2016-033&r=net |
| By: | Hong Li; Shamim Ahmed; Thanaset Chevapatrakul |
| Abstract: | The vote of the people of the United Kingdom to leave the European Union following the referendum on June 23, 2016, created tremendous uncertainty in the financial markets. This paper documents the stock market interdependence across four major European markets around this rare and unique event. We uncover the characteristics of the volatility spillover dynamics across France, Germany, Switzerland and the United Kingdom using intraday data at 15-minute intervals. Specifically, we quantify four types of volatility spillover measures: total (non-directional) spillovers, gross directional spillovers, net directional spillovers, and net pairwise spillovers. Our results point to considerable interdependence among the four stock markets. We find that France and Germany were in general the net volatility transmitters to others, while Switzerland and the United Kingdom the net receivers from others during January 4, 2016 to September 30, 2016. Around the day of the Brexit referendum, France and the United Kingdom appear to be net transmitters, while Germany and Switzerland net receivers. Our empirical analysis uncovers important information regarding stock market interdependence, which will be beneneficial to both policymakers and practitioners. |
| Keywords: | Market risk, Stock market, Spillover effect, Vector autoregression, and Variance decomposition. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcfc:16/06&r=net |
| By: | Emilio, Colombo; Valentina, Rotondi; Luca, Stanca; |
| Abstract: | This paper investigates the role played by social interactions in explaining the effects of macroeconomic conditions on well-being. Using survey data for a representative sample of Italian individuals, we find that social interactions play a dual role as both moderators and mediators of the effects of macroeconomic conditions. On the one hand, the well-being of people who spend more time with their friends or go out more often is less sensitive to the effects of macroeconomic fluctuations. On the other hand, social interactions are negatively affected by worsening macroeconomic conditions, thus playing a relevant role in the transmission of macroeconomic shocks to subjective well-being. More specifically, the negative impact of macroeconomic downturns on frequency of going out and active participation in associations contributes to explain the adverse effects of recessions on satisfaction with life and with individual life domains. |
| Keywords: | macroeconomic fluctuations, unemployment, subjective well-being |
| JEL: | E32 I31 I38 |
| Date: | 2016–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:355&r=net |
| By: | Uwe Cantner (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Tina Wolf (University of Southern Denmark, Department of Marketing and Management) |
| Abstract: | Earlier studies have shown that entrepreneurs play a key role in shaping regional development. Innovator networks where these entrepreneurs are members of have been identified as one among many critical factors for their firms' success. This paper intents to go one step further and analyses in how far differing characteristics of these networks lead to different firm performances along the early stages of the organizational life cycle (nascent stage, emergent stage, early growth stage). A sample of 149 patenting (innovative) firms in Thuringia is analysed, using data from the commercial register and the German patent office. The results show that there is an inverted u-shaped relationship between the chances of a firm to survive and the connectivity of the network the firms are connected to but only in the later stage of the early organizational life cycle; while the structure of the ego-network never plays a role. A quite central position in the network shows-up to be unfavourable. |
| Keywords: | Innovation, Entrepreneurship, Networks, Inventor, Patents, Survival |
| JEL: | L25 L26 O30 L14 |
| Date: | 2016–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2016-021&r=net |
| By: | Crass, Dirk; Rammer, Christian; Aschhoff, Birgit |
| Abstract: | The paper analyzes how geographical clustering of beneficiaries might affect the effectiveness of public innovation support programs. The geographical proximity of firms operating in the same industry or field of technology is expected to facilitate innovation through knowledge spillovers and other localization advantages. Public innovation support programs may leverage these advantages by focusing on firms that operate in a cluster. We investigate this link using data from a large German program that co-funds R&D projects of SMEs in key technology areas called 'Innovative SMEs'. We employ three alternative cluster measures which capture industry, technology and knowledge dimensions of clusters. Regardless of the measure, firms located in a geographical cluster are more likely to participate in the program. Firms being part of a knowledge-based cluster significantly increases their chance of receiving public financial support. We find no effects, however, of geographical clustering on the program's effectiveness in terms of input or output additionality. |
| Keywords: | Innovation,Government Policy,Regional Government Analysis |
| JEL: | C35 H50 O31 O32 O38 R59 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:16083&r=net |
| By: | Pouyet, Jérôme; Trégouët, Thomas |
| Abstract: | We analyze the competitive impact of vertical integration between a platform and a manufacturer when platforms provide operating systems for devices sold by manufacturers to customers, and, customers care about the applications developed for the operating systems. Two-sided network effects between customers and developers create strategic substitutability between manufacturers' prices. When it brings efficiency gains, vertical integration increases consumer surplus, is not profitable when network effects are strong, and, benefits the non-integrated manufacturer. When developers bear a cost to make their applications available on a platform, manufacturers boost the participation of developers by affiliating with the same platform. This creates some market power for the integrated firm and vertical integration then harms consumers, is always profitable, and, leads to foreclosure. Introducing developer fees highlights that not only the level, but also the structure of indirect network effects matter for the competitive analysis. |
| Keywords: | foreclosure; network effects; Two-sided markets; vertical integration |
| JEL: | D43 L10 L40 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11703&r=net |