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on Network Economics |
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Issue of 2017‒03‒19
four papers chosen by Pedro CL Souza Pontifícia Universidade Católica do Rio de Janeiro |
| By: | Laurent Bergé (CREA, Université du Luxembourg); Nicolas Carayol, GREThA, UMR CNRS 5113, Université de Bordeaux (GREThA, UMR CNRS 5113, Université de Bordeaux); Pascale Roux (GREThA, UMR CNRS 5113, Université de Bordeaux) |
| Abstract: | Social networks are expected to matter for invention in cities, but empirical evidence is still puzzling. In this paper, we provide new results on urban patenting covering more than twenty years of European patents invented by nearly one hundred thousand inventors located in France. Elaborating on the recent economic literatures on peer effects and on games in social networks, we assume that the productivity of an inventor’s efforts is positively affected by the efforts of his or her partners and negatively by the number of these partners’ connections. In this framework, inventors’ equilibrium outcomes are proportional to the square of their network centrality, which encompasses, as special cases, several well-known forms of centrality (Degree, Katz-Bonacich, Page-Rank). Our empirical results show that urban inventors benefit from their collaboration network. Their production increases when they collaborate with more central agents and when they have more collaborations. Our estimations suggest that inventors’ productivity grows sublinearly with the efforts of direct partners, and that they incur no negative externality from them having many partners. Overall, we estimate that a one standard deviation increase in local inventors’ centrality raises future urban patenting by 13%. |
| Keywords: | invention ; cities; network centrality; co-invention network; patent data |
| JEL: | O31 R11 D85 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:17-03&r=net |
| By: | Marco Di Maggio (Harvard Business School and National Bureau of Economic Research (NBER)); Francesco A. Franzoni (University of Lugano and Swiss Finance Institute); Amir Kermani (University of California and National Bureau of Economic Research (NBER)); Carlo Sommavilla (University of Lugano and Swiss Finance Institute) |
| Abstract: | This paper shows that the network of relationships between brokers and institutional investors shapes the information diffusion in the stock market. We exploit trade-level data to show that trades channeled through central brokers earn significantly positive abnormal returns. This result is not due to differences in the investors that trade through central brokers or to stocks characteristics, as we control for this heterogeneity; nor is it the result of better trading execution. We find that a key driver of these excess returns is the information that central brokers gather by executing informed trades, which is then leaked to their best clients. We show that after large informed trades, a significantly higher volume of other investors execute similar trades through the same central broker, allowing them to capture higher returns in the first few days after the initial trade. The best clients of the broker executing the informed trade, and the asset managers affiliated with the broker, are among the first to benefit from the information about order flow. This evidence also suggests that an important source of alpha for fund managers is the access to better connections rather than superior skill. |
| Keywords: | broker networks, institutional investors, asset prices, information |
| JEL: | G12 G14 G24 |
| Date: | 2017–02 |
| URL: | http://d.repec.org/n?u=RePEc:chf:rpseri:rp1708&r=net |
| By: | Yevgeniya Korniyenko; Magali Pinat; Brian Dew |
| Abstract: | Anecdotal evidence suggests the existence of specific choke points in the global trade network revealed especially after natural disasters (e.g. hard drive components and Thailand flooding, Japanese auto components post-Fukushima, etc.). Using a highly disaggregated international trade database we assess the spillover effects of supply shocks from the import of specific goods. Our goal is to identify inherent vulnerabilities arising from the composition of a country’s import basket and to propose effective mitigation policies. First, using network analysis tools we develop a methodology for evaluating and ranking the supply fragility of individual traded goods. Next, we create a country-level measure to determine each country’s supply shock vulnerability based on the composition of their individual import baskets. This measure evaluates the potential negative supply shock spillovers from the import of each good. |
| Keywords: | International trade;External shocks;Manufactured goods;Supply;Imports;International trade, supply shocks, spillovers, network analysis. |
| Date: | 2017–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:17/30&r=net |
| By: | Laura Alfaro (Harvard Business School and NBER); Maggie X. Chen (George Washington University) |
| Abstract: | Multinationals exhibit distinct agglomeration patterns which have transformed the global landscape of industrial production (Alfaro and Chen, 2014). Using a unique worldwide plant-level dataset that reports detailed location, ownership, and operation information for plants in over 100 countries, we construct a spatially continuous index of pairwise-industry agglomeration and investigate the patterns and determinants underlying the global economic geography of multinational firms. In particular, we run a horse-race between two distinct economic forces: location fundamentals and agglomeration economies. We find that location fundamentals including market access and comparative advantage and agglomeration economies including capital-good market externality and technology diffusion play a particularly important role in multinationals’ economic geography. These findings remain robust when we use alternative measures of trade costs, address potential reverse causality, and explore regional patterns. |
| Keywords: | multinational firm, economic geography, agglomeration, location fun-damentals, agglomeration economies |
| JEL: | F2 D2 R1 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2016-18&r=net |