nep-net New Economics Papers
on Network Economics
Issue of 2019‒01‒28
four papers chosen by
Pedro CL Souza
Pontifícia Universidade Católica do Rio de Janeiro

  1. Learning Spillovers in Conditional Welfare Programs: Evidence from Brazil By Fernanda Brollo; Katja Maria Kaufmann; Eliana La Ferrara
  2. Relative Age Effect on European Adolescents' Social Network By Fumarco, Luca; Baert, Stijn
  3. The Origins of Firm Heterogeneity: A Production Network Approach By Andrew B. Bernard; Emmanuel Dhyne; Glenn Magerman; Kalina Manova; Andreas Moxnes
  4. Managerial Networks and Shareholder Value: Evidence from Sudden Deaths By Kirsten Tangaa Nielsen; Felix von Meyerinck; ;

  1. By: Fernanda Brollo; Katja Maria Kaufmann; Eliana La Ferrara
    Abstract: We study spillovers in learning about the enforcement of Bolsa Familia, a program conditioning benefits on children’s school attendance. Using original administrative data, we find that individuals’ compliance responds to penalties incurred by their classmates and by siblings’ classmates (in other grades/schools). As the severity of penalties increases with repeated noncompliance, the response is larger when peers are punished for “higher stages†than the family’s, consistent with learning. Individuals also respond to penalties experienced by neighbors who are exogenously scheduled to receive notices on the same day. Our results point to important social multiplier effects of enforcement via learning.
    Date: 2018–11
  2. By: Fumarco, Luca (STATEC Research – National Institute of Statistics and Economic Studies); Baert, Stijn (Ghent University)
    Abstract: We contribute to the literature on relative age effects on pupils' (non-cognitive) skills formation by studying students' social network. We investigate data on European adolescents from the Health Behaviour in School Aged Children survey and use an instrumental variables approach to account for endogeneity of relative age while controlling for confounders, namely absolute age, season-of-birth, and family socio-economic status. We find robust evidence that suggests the existence of a substitution effect: the youngest students within a class e-communicate more frequently than relatively older classmates but have fewer friends and meet with them less frequently.
    Keywords: relative age, adolescents, education, Europe, social network
    JEL: I21
    Date: 2018–11
  3. By: Andrew B. Bernard; Emmanuel Dhyne; Glenn Magerman; Kalina Manova; Andreas Moxnes
    Abstract: This paper quantifies the origins of firm size heterogeneity when firms are interconnected in a production network. Using the universe of buyer-supplier relationships in Belgium, the paper develops a set of stylized facts that motivate a model in which firms buy inputs from upstream suppliers and sell to downstream buyers and final demand. Larger firm size can come from high production capability, more or better buyers and suppliers, and/or better matches between buyers and suppliers. Downstream factors explain the vast majority of firm size heterogeneity. Firms with higher production capability have greater market shares among their customers, but also higher input costs and fewer customers. As a result, high production capability firms have lower sales unconditionally and higher sales conditional on their input prices. Counterfactual analysis suggests that the production network accounts for more than half of firm size dispersion. Taken together, our results suggest that multiple firm attributes underpin their success or failure, and that models with only one source of firm heterogeneity fail to capture the majority of firm size dispersion.
    JEL: F10 F12 F16 L23 L25
    Date: 2019–01
  4. By: Kirsten Tangaa Nielsen; Felix von Meyerinck; ;
    Abstract: This paper investigates the causal effect of connections among top executives and directors of different firms on shareholder value using a quasi-natural experiment. Our identification strategy rests on the idea that sudden deaths trigger unexpected and exogenous dissolutions of connections, which enables us to isolate the value of managerial connections by studying stock price reactions at firms where managers connected to a suddenly deceased manager work. Our results show that firms connected to a suddenly deceased manager experience a statistically significant reduction in shareholder value between 1.6 and 2.6 million USD, which is consistent with the notion that managerial connections foster shareholder value. When exploring the cross-sectional variation, we find evidence that connections to inside directors, connections established via previously shared work engagements, and within-industry connections are most valuable.
    Keywords: Social networks, Firm value, Sudden death
    JEL: L14 G14 G34
    Date: 2018–10

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