nep-net New Economics Papers
on Network Economics
Issue of 2022‒11‒07
eleven papers chosen by
Alfonso Rosa García
Universidad de Murcia

  1. Similarity and Connectivity of Industrial Networks of Japanese Prefecture Based on Firm-level Data By GOTO Hiromitsu; SOUMA Wataru
  2. The Network Propensity Score: Spillovers, Homophily, and Selection into Treatment By Alejandro Sanchez-Becerra
  3. Proximity, Similarity, and Friendship Formation: Theory and Evidence By A. Arda Gitmez; Rom\'an Andr\'es Z\'arate
  4. Shock propagation in international multilayer food-production network determines global food availability: the case of the Ukraine war By Moritz Laber; Peter Klimek; Martin Bruckner; Liuhuaying Yang; Stefan Thurner
  5. Tax reforms and network effects By Ferreira, Pedro Cavalcanti; Delalibera, Bruno Ricardo; Gomes, Diego Braz Pereira; Soares, Johann Rodrigues de Souza
  6. Peer networks and malleability of educational aspirations By González Amador, Michelle; Cowan, Robin; Nillesen, Eleonora
  7. Power in the Pipeline By Quentin Gallea; Massimo Morelli; Dominic Rohner
  8. Trade Networks in Latin America : Spatial Inefficiencies and Optimal Expansions By Gorton,Nicole Emily; Ianchovichina,Elena
  9. Max-linear graphical models with heavy-tailed factors on trees of transitive tournaments By Asenova, Stefka; Segers, Johan
  10. Information Advantage or Bias Related to Social Ties: Evidence from a peer review system for national research grants By ONISHI Koichiro; OWAN Hideo
  11. The imperfect competition ladder in economic development: a new map of world trade using complexity analysis By Gala, Paulo; Rodrigues Júnior, Luiz Antonio; Castro, Lavinia Barros de; Carvalho, Andre Roncaglia de

  1. By: GOTO Hiromitsu; SOUMA Wataru
    Abstract: Understanding the industrial structure of inner and inter prefectures is crucial for policymakers to make economic policies according to evidence. To address this issue, using the dataset of financial statements and connections for one million firms in Japan collected by Tokyo Shoko Research Inc., we construct a multiplex supply network with 47 layers equivalent to prefectures. Applying clustering analysis based on the Jensen-Shannon distance between networks and the community detection techniques known as the Infomap method to this multiplex supply network, we clarify industrial structural similarities and differences for each prefecture. Finally, we compare the results for multiplex supply networks and the well-known facts for each prefecture's Input-Output table to evaluate our result's validity and complementarity. Our findings of this study are as follows. First, from 2011 to 2018, the industrial networks of 47 prefectures can be classified into three structural patterns by a degree of urbanization. Second, the hierarchical community structure can be observed using firm-level data. However, this hierarchical community structure cannot be seen in the conventional Input-Output table dataset. Therefore, our findings suggest a new classification approach for prefectures based on similarities in the industrial structure and contribute to a better insight into the geographical characteristics of each region's industrial structure.
    Date: 2022–09
  2. By: Alejandro Sanchez-Becerra
    Abstract: I establish primitive conditions for unconfoundedness in a coherent model that features heterogeneous treatment effects, spillovers, selection-on-observables, and network formation. I identify average partial effects under minimal exchangeability conditions. If social interactions are also anonymous, I derive a three-dimensional network propensity score, characterize its support conditions, relate it to recent work on network pseudo-metrics, and study extensions. I propose a two-step semiparametric estimator for a random coefficients model which is consistent and asymptotically normal as the number and size of the networks grows. I apply my estimator to a political participation intervention Uganda and a microfinance application in India.
    Date: 2022–09
  3. By: A. Arda Gitmez; Rom\'an Andr\'es Z\'arate
    Abstract: Can proximity make friendships more diverse? To address this question, we propose a learning-driven friendship formation model to study how proximity and similarity influence the likelihood of forming social connections. The model predicts that proximity affects more friendships between dissimilar than similar individuals, in opposition to a preference-driven version of the model. We use an experiment at selective boarding schools in Peru that generates random variation in the physical proximity between students to test these predictions. The empirical evidence is consistent with the learning model: while social networks exhibit homophily by academic achievement and poverty, proximity generates more diverse social connections.
    Date: 2022–10
  4. By: Moritz Laber; Peter Klimek; Martin Bruckner; Liuhuaying Yang; Stefan Thurner
    Abstract: The war in Ukraine highlighted the vulnerability of the global food supply system. Due to dependencies in the global food-production network, the local loss of one crop can lead to shortages in other countries and affect other products made from it. Previous studies treat products in isolation and do not account for product conversion during production. Here, we reveal the losses of 125 food products after a localized shock to agricultural production in 192 countries using a multilayer network model of trade (direct) and conversion of food products (indirect), thereby quantifying $10^8$ shock transmissions. We find that a complete agricultural production loss in Ukraine has highly heterogeneous impacts on other countries, causing relative losses of 89% in sunflower oil and 85% in maize via direct effects, and up to 25% in poultry meat via indirect impacts. Our model offers a general framework to assess systemic risks in the food system
    Date: 2022–10
  5. By: Ferreira, Pedro Cavalcanti; Delalibera, Bruno Ricardo; Gomes, Diego Braz Pereira; Soares, Johann Rodrigues de Souza
    Abstract: This paper investigates the effects of a tax reform that eliminates tax rate heterogeneity and cumulative taxation using a general equilibrium model calibrated to Brazil that includes multiple sectors with market power. Industries are connected through input-output linkages and changes in tax costs are not confined within industries. The tax reform shocks propagate through the production network, which may amplify or mitigate their results. The revenue-neutral tax reform generates gains of 7.8% of GDP and 1.9% of welfare. Just eliminating VAT rate dispersion leads to a 5.9% increase in GDP. As expected, sectors that were heavily taxed prior to the reform, as well as their suppliers, benefit the most. Yet, due to propagation effects, in 10 sectors direct taxes increased but output and profits did not fall. This is because their costs were reduced as a result of lower taxes on their suppliers and/or increased demand. Moreover, tax distortions were leading to a shorter and inefficient production chain as the reform significantly changed the linkage structure of the economy.
    Date: 2022–10–07
  6. By: González Amador, Michelle (Maastricht Graduate School of Governance, RS: GSBE MGSoG); Cowan, Robin (RS: GSBE Theme Creativity, Innovation & Entrepreneurship , Mt Economic Research Inst on Innov/Techn); Nillesen, Eleonora (Maastricht Graduate School of Governance, RS: GSBE MGSoG, RS: GSBE UM-BIC)
    Abstract: Continuing education beyond the compulsory years of schooling is one of the most important choices an adolescent has to make; higher education is associated with a host of social and economic benefits both for the person and its community. Today, there is ample evidence that educational aspirations are an important determinant of said choice. We implement a multilevel, networked experiment in 45 Mexican high schools, and provide evidence of the malleability of educational aspirations, and the interdependence of students' choices and the effect of our intervention with peer networks. Moreover, we find that a video- intervention, which combines role-models and information about returns to education, is successful in updating students' beliefs and consequently educational aspirations.
    JEL: A21 C21 C22 C93 D83 D91 I29
    Date: 2022–09–19
  7. By: Quentin Gallea; Massimo Morelli; Dominic Rohner
    Abstract: This paper provides the first comprehensive empirical analysis of the role of natural gas for the domestic and international distribution of power. The crucial role of pipelines for the trade of natural gas determines a set of network effects that are absent for other natural resources such as oil and minerals. Gas rents are not limited to producers but also accrue to key players occupying central nodes in the gas network. Drawing on our new gas pipeline data, this paper shows that gas betweenness-centrality of a country increases substantially the ruler's grip on power as measured by leader turnover. A main mechanism at work is the reluctance of connected gas trade partners to impose sanctions, meaning that bad behavior of gas-central leaders is tolerated for longer before being sanctioned. Overall, this reinforces the notion that fossil fuels are not just poison for the environment but also for political pluralism and healthy regime turnover.
    Date: 2022–10
  8. By: Gorton,Nicole Emily; Ianchovichina,Elena
    Abstract: How do trade connectivity issues affect the efficient spatial distribution of economicactivity within and across countries in Latin America This paper uses a spatial general equilibrium framework toconstruct optimal transport networks and optimal expansions to existing networks in most Latin American countries, aswell as within MERCOSUR and the Andean Community. The paper assesses the average annual welfare losses due toinefficient domestic road networks in Latin America at 1.7 percent, ranging from 2.5 percent in Brazil to 0.2 percentin El Salvador. Spatial misallocation of transnational road networks is associated with annual welfare losses of 1.8percent in MERCOSUR and 1.6 percent in the Andean Community. Optimal investments in improvements and expansions ofexisting networks can correct these inefficiencies and reduce spatial inequality within countries. Theseinvestments correlate relatively well with World Bank road projects because both the model and the World Bankprioritize investments in high population areas. Transnational road improvements benefit the most the leastdeveloped country in each trade bloc. The results are robust to changes in data sources and model assumptions.
    Keywords: International Trade and Trade Rules,Transport Services,Green Issues,Roads & Highways,Inter-Urban Roads and Passenger Transport,Roads and Highways Performance,Inequality
    Date: 2021–11–05
  9. By: Asenova, Stefka (Université catholique de Louvain, LIDAM/ISBA, Belgium); Segers, Johan (Université catholique de Louvain, LIDAM/ISBA, Belgium)
    Abstract: Graphical models with heavy-tailed factors can be used to model extremal depen- dence or causality between extreme events. In a Bayesian network, variables are recur- sively defined in terms of their parents according to a directed acyclic graph (DAG). We focus on max-linear graphical models with respect to a special type of graphs, which we call a tree of transitive tournaments. The latter are block graphs combining in a tree-like structure a finite number of transitive tournaments, each of which is a DAG in which every two nodes are connected. We study the limit of the joint tails of the max-linear model conditionally on the event that a given variable exceeds a high threshold. Under a suitable condition, the limiting distribution involves the factorization into indepen- dent increments along the shortest trail between two variables, thereby imitating the behavior of a Markov random field. We are also interested in the identifiability of the model parameters in case some variables are latent and only a subvector is observed. It turns out that the parameters are identifiable under a criterion on the nodes carrying the latent variables which is easy and quick to check.
    Keywords: Max-linear model ; heavy tails ; extremal dependence ; conditional dependence ; probabilistic graphical model ; directed acyclic graph ; tournaments ; extremes
    Date: 2022–09–30
  10. By: ONISHI Koichiro; OWAN Hideo
    Abstract: We examine how reviewer–applicant social ties (department and university affiliation, co-applicant relationships, research field similarity) influence reviewer evaluations, based on Japanese research grant application data (2005–2016). All relationships between social ties and scores are positively correlated, even after accounting for unobservable applicant characteristics and proposal quality. Regarding bias and information advantage effects, upward deviation from department match negatively correlates with applicants’ future research outputs, implying bias. Upward deviation from research field or university match positively correlates with future productivity, indicating that information advantage predicts applicants’ future productivity. Information advantage through social ties is stronger for younger applicants.
    Date: 2022–09
  11. By: Gala, Paulo; Rodrigues Júnior, Luiz Antonio; Castro, Lavinia Barros de; Carvalho, Andre Roncaglia de
    Abstract: This paper applies complex networks techniques to the study of world trade, with a focus on imperfect competition and development literature. The analysis uses a database of 4657 HS products and 183 countries to measure world market concentration by companies’ country of origin from 2007 to 2017. The empirical findings corroborate some of structuralist and development economists’ claims, namely: countries with high-income per capita focus on producing and exporting manufactured and complex goods in more concentrated markets, whereas countries with low-income per capita specialize in producing and exporting non-complex commodities in less concentrated markets
    Date: 2022–09–01

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