nep-net New Economics Papers
on Network Economics
Issue of 2023‒12‒04
fourteen papers chosen by
Alfonso Rosa García, Universidad de Murcia

  1. The Role of Child Gender in the Formation of Parents’ Social Networks By Aristide Houndetoungan; Asad Islam; Michael Vlassopoulos; Yves Zenou
  2. Bayesian SAR model with stochastic volatility and multiple time-varying weights By Costola, Michele; Iacopini, Matteo; Wichers, Casper
  3. Mapping continuous learning using social network research: a social network study of Australian Genomics as a Learning Health System By Louise Ellis; Janet Long; Chiara Pomare; Zeyad Mahmoud; Rebecca Lake; Genevieve Dammery; Jeffrey Braithwaite
  4. Bayesian SAR model with stochastic volatility and multiple time-varying weights By Michele Costola; Matteo Iacopini; Casper Wichers
  5. You'll never walk alone: Unemployment, social networks and leisure activities By Filomena, Mattia; Picchio, Matteo
  6. Stress-testing inflation exposure: Systemically significant prices and asymmetric shock propagation in the EU28 By Ipsen, Leonhard; Aminian, Armin; Schulz-Gebhard, Jan
  7. Occupational Trajectories Among Refugees in Austria: The Role of Co-ethnic and Austrian Social Networks in Job Search By Sandra M. Leitner
  8. Learning or Partnering? An Investigation of Foreign Real Estate Investment Strategies By Melanie Zhang; Anupam Nanda
  9. Are Sanctions for Losers? By Fabio Ashtar Telarico
  10. Estimating Systemic Risk within Financial Networks: A Two-Step Nonparametric Method By Weihuan Huang
  11. Matching through Search Channels By Carrillo-Tudela, Carlos; Kaas, Leo; Lochner, Benjamin
  12. “Time is of the essence”: relationship between hospital staff perceptions of time, safety attitudes and staff wellbeing By Louise A Ellis; Yvonne Tran; Chiara Pomare; Janet C Long; Kate Churruca; Zeyad Mahmoud; Winston Liauw; Jeffrey Braithwaite
  13. Debiased Fixed Effects Estimation of Binary Logit Models with Three-Dimensional Panel Data By Amrei Stammann
  14. Some coordination problems are harder than others By Argyrios Deligkas; Eduard Eiben; Gregory Gutin; Philip R. Neary; Anders Yeo

  1. By: Aristide Houndetoungan (Department of Economics, Thema, Cy Cergy Paris Université); Asad Islam (Centre for Development Economics and Sustainability (CDES) and Department of Economics, Monash University, and J-PAL); Michael Vlassopoulos (Economics Department, Social Sciences, University of Southampton, and IZA.); Yves Zenou (Department of Economics, Monash University, CEPR, and IZA)
    Abstract: Social networks play an important role in various aspects of life. While extensive research has explored factors such as gender, race, and education in network formation, one dimension that has received less attention is the gender of one’s child. Children tend to form friendships with same gender peers, potentially leading their parents to interact based on their child’s gender. Focusing on households with children aged 3-5, we leverage a rich dataset from rural Bangladesh to investigate the role of children’s gender in parental network formation. We estimate an equilibrium model of network formation that considers a child’s gender alongside other socioeconomic factors. Counterfactual analyses reveal that children’s gender significantly shapes parents’ network structure. Specifically, if all children share the same gender, households would have approximately 15% more links, with a stronger effect for families having girls. Importantly, the impact of children’s gender on network structure is on par with or even surpasses that of factors such as income distribution, parental occupation, education, and age. These findings carry implications for debates surrounding coed versus single-sex schools, as well as policies that foster inter-gender social interactions among children.
    Keywords: Social networks, early childhood, network formation, gender
    JEL: C57 D85 J16 O12
    Date: 2023–11
  2. By: Costola, Michele; Iacopini, Matteo; Wichers, Casper
    Abstract: A novel spatial autoregressive model for panel data is introduced, which incorporates multilayer networks and accounts for time-varying relationships. Moreover, the proposed approach allows the structural variance to evolve smoothly over time and enables the analysis of shock propagation in terms of time-varying spillover effects. The framework is applied to analyse the dynamics of international relationships among the G7 economies and their impact on stock market returns and volatilities. The findings underscore the substantial impact of cooperative interactions and highlight discernible disparities in network exposure across G7 nations, along with nuanced patterns in direct and indirect spillover effects.
    Keywords: Bayesian inference, International relationships, Multilayer networks, Spatial autoregressive model, Time-varying networks, Stochastic volatility
    JEL: C11 C33 C51 C58
    Date: 2023
  3. By: Louise Ellis (Macquarie University [Sydney]); Janet Long (Macquarie University [Sydney]); Chiara Pomare (Macquarie University [Sydney]); Zeyad Mahmoud (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris] - Nantes Univ - IAE Nantes - Nantes Université - Institut d'Administration des Entreprises - Nantes - Nantes Université - pôle Sociétés - Nantes Univ - Nantes Université - IUML - FR 3473 Institut universitaire Mer et Littoral - UM - Le Mans Université - UA - Université d'Angers - UBS - Université de Bretagne Sud - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - CNRS - Centre National de la Recherche Scientifique - Nantes Université - pôle Sciences et technologie - Nantes Univ - Nantes Université - Nantes Univ - ECN - École Centrale de Nantes - Nantes Univ - Nantes Université, Macquarie University [Sydney]); Rebecca Lake (Macquarie University [Sydney]); Genevieve Dammery (Macquarie University [Sydney]); Jeffrey Braithwaite (Macquarie University [Sydney])
    Abstract: Objectives To explore a macrolevel Learning Health System (LHS) and examine if an intentionally designed network can foster a collaborative learning community over time. The secondary aim was to demonstrate the application of social network research to the field of LHS. Design Two longitudinal online questionnaires of the Australian Genomics learning community considering relationships between network members at three time points: 2016, 2018, 2019. The questionnaire included closed Likert response questions on collaborative learning patterns and open-response questions to capture general perceptions of the community. Social network data were analysed and visually constructed using Gephi V.0.9.2 software, Likert questions were analysed using SPSS, and open responses were analysed thematically using NVivo. Setting Australian Genomic Health Alliance. Participants Clinicians, scientists, researchers and community representatives. Results Australian Genomics members highlighted the collaborative benefits of the network as a learning community to foster continuous learning in the ever-evolving field of clinical genomics. The learning community grew from 186 members (2016), to 384 (2018), to 439 (2019). Network density increased (2016=0.023, 2018=0.043), then decreased (2019=0.036). Key players remained consistent with potential for new members to achieve focal positions in the network. Informal learning was identified as the most influential learning method for genomic practice. Conclusions This study shows that intentionally building a network provides a platform for continuous learning—a fundamental component for establishing an LHS. The Australian Genomics learning community shows evidence of maturity and sustainability in supporting the continuous learning culture of clinical genomics. The network provides a practical means to spread new knowledge and best practice across the entire field. We show that intentionally designed networks provide the opportunity and means for interdisciplinary learning between diverse agents over time and demonstrate the application of social network research to the LHS field.
    Date: 2022–10–05
  4. By: Michele Costola; Matteo Iacopini; Casper Wichers
    Abstract: A novel spatial autoregressive model for panel data is introduced, which incorporates multilayer networks and accounts for time-varying relationships. Moreover, the proposed approach allows the structural variance to evolve smoothly over time and enables the analysis of shock propagation in terms of time-varying spillover effects. The framework is applied to analyse the dynamics of international relationships among the G7 economies and their impact on stock market returns and volatilities. The findings underscore the substantial impact of cooperative interactions and highlight discernible disparities in network exposure across G7 nations, along with nuanced patterns in direct and indirect spillover effects.
    Date: 2023–10
  5. By: Filomena, Mattia; Picchio, Matteo
    Abstract: We analyse how unemployment affects individuals' social networks, leisure activities, and the related satisfaction measures. Using the LISS panel, a representative longitudinal survey of the Dutch population, we estimate the effects by inverse propensity score weighting in a difference-in-differences design in order to deal with unobserved heterogeneity and unbalanced covariate distribution between treated and control units potentially associated with the dynamics of the outcome variables. We find that, after job loss, individuals increase their network size by strengthening their closest contacts within the family, spending more time with neighbors, and making more use of social media. Although they devote their extra leisure time mostly to private activities, our results do not support the hypothesis of social exclusion following unemployment.
    Keywords: Unemployment, job loss, social exclusion, leisure, social satisfaction, doubly robust difference-in-differences
    JEL: I31 J01 J64
    Date: 2023
  6. By: Ipsen, Leonhard; Aminian, Armin; Schulz-Gebhard, Jan
    Abstract: Building on the seminal paper of Weber et al. (2022), we provide a stress-test framework of inflation exposure and apply it to the EU28. This adds a yet unrecognised dimension to the latest calls for supply chain stress-tests. We address both the ex- and internal dimensions of inflation exposure for the former EU28 countries within global production networks via a Leontief price model. Using data from the World Input Output Database, we confirm the existence of systemically significant sectors for the overall price level in the EU28, EU periphery and core, respectively. We show that while the direct price effects of various sectors on the respective consumption shares are significant, about two-thirds of the overall effects are indirect and thus a result of higher-order propagation within the production network. It crystallizes that two properties (size and centrality) may render a sector systemically significant. Breaking down the geographical component, we show that the indirect effect is even larger for peripheral countries, which points to a higher exposure to world market prices. By tracing individual shock trajectories, we confirm this hypothesis: price volatility originating from the core countries impacts the peripheral countries more than vice versa. In addition to this, our method to recover consumption substitution effects shows that substitution is much more limited in the European periphery. Overall, we show consumers in peripheral countries are relatively more exposed to price volatility.
    Keywords: inflation, stress-test, input-output analysis, Europe
    Date: 2023
  7. By: Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: This paper analyses occupational trajectories of refugees from their last job in the home country to their first and current jobs in Austria and the role of co-ethnic and Austrian social networks in job search, using data from a large-scale survey of recognised refugees from Syria, Afghanistan, Iraq and Iran who have predominantly come to Austria since 2010, thereby covering the strong refugee wave of 2015 2016. The results corroborate a U-shaped pattern, with a sharp initial occupational loss followed by a rather moderate occupational recovery. Although native social networks play no role for occupational changes, co-ethnic social networks – particularly when used as a stand-alone job search strategy – prove detrimental along the entire trajectory. However, co-ethnic social networks are beneficial if used in combination with the Austrian labour market service or NGOs. Some refugees prove particularly vulnerable, such as older refugees or highly educated refugees who undergo more pronounced initial occupational downgrading, with subsequent occupational upgrading either limited or absent.
    Keywords: Refugees, labour market integration, occupational trajectories, social capital
    JEL: J15 J24 J62
    Date: 2023–11
  8. By: Melanie Zhang; Anupam Nanda
    Abstract: This study examines international real estate investors’ strategy choices and the implications for the commercial real estate (CRE) market. The empirical work adopts a network analysis framework to quantify the market connections of the institutional investors and their influences, with a two-stage endogenous binary model employed to address foreign investors’ incentives to choose strategic partnerships and strengthen the bargaining power in the host market. We first show network patterns and dynamics. We also highlight the impact of network formation on transaction pricing. The findings from selected CRE markets in England indicate that investors with broker representation, foreign investors, and those working with external management partners achieve pricing premia in property purchases. The local experience accumulated from past transactions strengthens bargaining power. Compared to London and non-London markets, it also looks at how the institutional environment might affect the prices of goods and services in both places.
    Keywords: commercial real estate; international investor; Network Analysis
    JEL: R3
    Date: 2023–01–01
  9. By: Fabio Ashtar Telarico (University of Ljubljana)
    Abstract: Studies built on dependency and world-system theory using network approaches have showed that international trade is structured into clusters of 'core'; and 'peripheral'; countries performing distinct functions. However, few have used these methods to investigate how sanctions affect the position of the countries involved in the capitalist world-economy. Yet, this topic has acquired pressing relevance due to the emergence of economic warfare as a key geopolitical weapon since the 1950s. And even more so in light of the preeminent role that sanctions have played in the US and their allies' response to the Russian-Ukrainian war. Applying several clustering techniques designed for complex and temporal networks, this paper shows that a shift in the pattern of commerce away from sanctioning countries and towards neutral/friendly ones. Additionally, there are suggestions that these shifts may lead to the creation of an alternative 'core' that interacts with the world-economy's periphery bypassing traditional 'core' countries such as EU member States and the US.
    Abstract: Les études fondées sur la théorie de la dépendance et du système mondial utilisant des approches de réseau ont montré que le commerce international est structuré en groupes de pays "centraux" et "périphériques" remplissant des fonctions distinctes. Cependant, peu d'entre elles ont utilisé ces méthodes pour étudier la manière dont les sanctions affectent la position des pays impliqués dans l'économie mondiale capitaliste. Pourtant, ce sujet est devenu d'une actualité brûlante en raison de l'émergence de la guerre économique en tant qu'arme géopolitique clé depuis les années 1950. Et ce d'autant plus que les sanctions ont joué un rôle prépondérant dans la réponse des États-Unis et de leurs alliés à la guerre russo-ukrainienne. En appliquant plusieurs techniques de regroupement conçues pour les réseaux complexes et temporels, cet article montre que la structure du commerce s'éloigne des pays sanctionnés et se rapproche des pays neutres ou amis. En outre, il est suggéré que ces changements peuvent conduire à la création d'un "noyau" alternatif qui interagit avec la périphérie de l'économie mondiale en contournant les pays du "noyau" traditionnel tels que les États membres de l'UE et les États-Unis.
    Abstract: Исследования, построенные на основе теории зависимости и теории мировых систем с использованием сетевых подходов, показали, что международная торговля структурирована на кластеры "ядра" и "периферии" - стран, выполняющих различные функции.Однако мало кто использовал эти методы для изучения того, как санкции влияют на положение стран-участниц в капиталистической мир-экономике.Между тем эта тема приобрела особую актуальность в связи с появлением с 1950-х годов экономической войны как одного из основных видов геополитического оружия.И тем более в свете той важнейшей роли, которую санкции сыграли в реакции США и их союзников на российско-украинскую войну. Применяя несколько методов кластеризации, разработанных для сложных и временных сетей, в данной работе показано, что в структуре торговли происходит смещение от стран, применяющих санкции, в сторону нейтральных/дружественных стран.Кроме того, высказываются предположения, что эти сдвиги могут привести к созданию альтернативного "ядра", взаимодействующего с периферией мировой экономики в обход традиционных стран "ядра", таких как государства - члены ЕС и США.
    Abstract: Студије засноване на теоријизависности и светског система користећимрежне приступе показале су да јемеђународна трговина структурисана укластере ‘језгра' и ‘периферних' земаља којеобављају различите функције. Међутим малоњих је користило ове методе да би истражилокако санкцијe утичу на положај земаљаукључених у капиталистичку светскуекономију. Ипак ова тема је постала хитназбог појаве економског сукоба као кључноггеополитичког оружја 1950-их и још више усветлу превасходне улоге коју су санкцијеодиграле у одговору САД и њихових савезникана руско-украјински рат. Примењујућинеколико техника груписања дизајнираних засложене и временске мреже, овај рад показујепомак у обрасцу трговине од земаља којесанкционишу ка неутралним/пријатељскимземљама. Поред тога постоје сугестије да овепромене могу довести до стварањаалтернативног „језгра" које је у интеракцијиса периферијом светске економије заобилазећитрадиционалне „језгро" земље као што судржаве чланице ЕУ и САД.
    Keywords: International trade, Dynamic networks, Blockmodeling, Russia, Iran, World-system theory, Sanctions
    Date: 2023–09
  10. By: Weihuan Huang
    Abstract: CoVaR (conditional value-at-risk) is a crucial measure for assessing financial systemic risk, which is defined as a conditional quantile of a random variable, conditioned on other random variables reaching specific quantiles. It enables the measurement of risk associated with a particular node in financial networks, taking into account the simultaneous influence of risks from multiple correlated nodes. However, estimating CoVaR presents challenges due to the unobservability of the multivariate-quantiles condition. To address the challenges, we propose a two-step nonparametric estimation approach based on Monte-Carlo simulation data. In the first step, we estimate the unobservable multivariate-quantiles using order statistics. In the second step, we employ a kernel method to estimate the conditional quantile conditional on the order statistics. We establish the consistency and asymptotic normality of the two-step estimator, along with a bandwidth selection method. The results demonstrate that, under a mild restriction on the bandwidth, the estimation error arising from the first step can be ignored. Consequently, the asymptotic results depend solely on the estimation error of the second step, as if the multivariate-quantiles in the condition were observable. Numerical experiments demonstrate the favorable performance of the two-step estimator.
    Date: 2023–10
  11. By: Carrillo-Tudela, Carlos (University of Essex); Kaas, Leo (Goethe University Frankfurt); Lochner, Benjamin (University of Erlangen-Nuremberg)
    Abstract: Firms and workers predominately match via job postings, networks of personal contacts or the public employment agency, all of which help to ameliorate labor market frictions. In this paper we investigate the extent to which these search channels have differential effects on labor market outcomes. Using novel linked survey-administrative data we document that (i) low-wage firms and low-wage workers are more likely to match via networks or the public agency, while high-wage firms and high-wage workers succeed more often via job postings; (ii) job postings help firms the most in poaching and attracting high-wage workers and help workers the most in climbing the job ladder. To evaluate the implications of these findings for employment, wages and labor market sorting, we structurally estimate an equilibrium job ladder model featuring two-sided heterogeneity, multiple search channels and endogenous recruitment effort. The estimation reveals that networks are the most cost-effective channel, allowing firms to hire quickly, yet attracting workers of lower average ability. Job postings are the most costly channel, facilitate hiring workers of higher ability, and matter most for worker-firm sorting. Although the public employment agency provides the lowest hiring probability, its removal has sizeable consequences, with aggregate employment declining by at least 1.4 percent and rising bottom wage inequality.
    Keywords: search channels, on-the-job search, recruitment effort, sorting, wage dispersion
    JEL: E24 J23 J31 J63 J64
    Date: 2023–11
  12. By: Louise A Ellis (Macquarie University [Sydney]); Yvonne Tran (Macquarie University [Sydney]); Chiara Pomare (Macquarie University [Sydney]); Janet C Long (Macquarie University [Sydney]); Kate Churruca (Macquarie University [Sydney]); Zeyad Mahmoud (IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes, Macquarie University [Sydney]); Winston Liauw (Macquarie University [Sydney]); Jeffrey Braithwaite
    Abstract: Background Hospitals are perceived as fast-paced and complex environments in which a missed or incorrect diagnosis or misread chart has the potential to lead to patient harm. However, to date, limited attention has been paid to studying how hospital sociotemporal norms may be associated with staff wellbeing or patient safety. The aim of this study was to use novel network analysis, in conjunction with well-established statistical methods, to investigate and untangle the complex interplay of relationships between hospital staff perceived sociotemporal structures, staff safety attitudes and work-related well-being. Method Cross-sectional survey data of hospital staff ( n = 314) was collected from four major hospitals in Australia. The survey included subscales from the Organizational Temporality Scale (OTS), two previously established scales of safety attitudes (teamwork climate and safety climate) and measures of staff-related wellbeing (job satisfaction, emotional exhaustion, depersonalisation). Results Using confirmatory factor analysis, we first tested a 19-item version of the OTS for use in future studies of hospital temporality (the OTS-H). Novel psychological network analysis techniques were then employed, which identified that "pace" (the tempo or rate of hospital activity) occupies the central position in understanding the complex relationship between temporality, safety attitudes and staff wellbeing. Using a path analysis approach, serial mediation further identified that pace has an indirect relationship with safety attitudes through wellbeing factors, that is, pace impacts on staff wellbeing, which in turn affects hospital safety attitudes. Conclusions The findings of this study are important in revealing that staff wellbeing and safety attitudes can be significantly improved by placing more focus on temporal norms, and in particular hospital pace. There are implications for increasing levels of trust and providing staff with opportunities to exercise greater levels of control over their work.
    Keywords: Temporality, Time, Job satisfaction, Burnout, Hospital
    Date: 2021–12
  13. By: Amrei Stammann
    Abstract: Naive maximum likelihood estimation of binary logit models with fixed effects leads to unreliable inference due to the incidental parameter problem. We study the case of three-dimensional panel data, where the model includes three sets of additive and overlapping unobserved effects. This encompasses models for network panel data, where senders and receivers maintain bilateral relationships over time, and fixed effects account for unobserved heterogeneity at the sender-time, receiver-time, and sender-receiver levels. In an asymptotic framework, where all three panel dimensions grow large at constant relative rates, we characterize the leading bias of the naive estimator. The inference problem we identify is particularly severe, as it is not possible to balance the order of the bias and the standard deviation. As a consequence, the naive estimator has a degenerating asymptotic distribution, which exacerbates the inference problem relative to other fixed effects estimators studied in the literature. To resolve the inference problem, we derive explicit expressions to debias the fixed effects estimator.
    Date: 2023–11
  14. By: Argyrios Deligkas; Eduard Eiben; Gregory Gutin; Philip R. Neary; Anders Yeo
    Abstract: In order to coordinate successfully individuals must first identify a target pattern of behaviour. In this paper we investigate the difficulty of identifying prominent outcomes in two kinds of binary action coordination problems in social networks: pure coordination games and anti-coordination games. For both environments, we determine the computational complexity of finding a strategy profile that (i) maximises welfare, (ii) maximises welfare subject to being an equilibrium, and (iii) maximises potential. We show that the complexity of these objectives can vary with the type of coordination problem. Objectives (i) and (iii) are tractable problems in pure coordination games, but for anti-coordination games are NP-hard. Objective (ii), finding the best Nash equilibrium, is NP-hard for both. Our results support the idea that environments in which actions are strategic complements facilitate successful coordination more readily than those in which actions are strategic substitutes.
    Date: 2023–11

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