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on Network Economics |
| By: | Paola Conconi; Fabrizio Leone; Glenn Magerman; Catherine Thomas |
| Abstract: | This paper provides a new explanation for the dominance of multinational corporations (MNCs) in international trade: after being acquired by an MNC, firms face lower entry frictions in countries in which their global parent already has a presence. We provide a model of firms’ export and import choices that delivers firm-level gravity regressions to isolate these “MNC network effects” from other channels through which multinationalownership can affect firms’ trade participation. We estimate the model combining rich administrative data for Belgium with data on MNCs’ global affiliate networks. Event study results reveal that acquired firms are more likely to start exporting to and importing from countries that belong—or that are exogenously added—to their parental network. The effects are stronger when new affiliates are geographically and culturally close to their direct parent, which can facilitate transfer of information about the global parent’s network. Combining the structure of our model with the empirical estimates, we find that MNC network effects have a large impact on firm growth. The effects of MNC ownership extend beyond the boundaries of the multinational: new affiliates are also more likely to start trading with countries that are geographically and culturally close to the MNC network, even if their parent has no affiliates there. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:eca:wpaper:2013/389310 |
| By: | Antonio Cabrales (Department of Economics, Universidad Carlos III Madrid); Lorenzo Ductor (Department of Economics Theory and History, Universidad de Granada); Ericka Rascon-Ramirez (Department of Economics, CIDE and Middlesex University London); Ismael Rodriguez-Lara (Department of Economics, Universidad de Malaga, and Economic Science Institute, Chapman University) |
| Abstract: | Women often find themselves in teams that hinder their productivity and earnings. We analyze the role of homophily and gender stereotypes in preferences for team formation and examine the effect of information on changing these preferences. We find that women are expected to perform better in female-type tasks (such as text and emotion-recognition). However, people prefer forming teams with their same gender. Our findings suggest that information can mitigate -but it does not eliminate- the influence of homophily on team formation. |
| Keywords: | gender differences, expectations, collaboration, network formation, team production |
| JEL: | C91 D03 D60 D81 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:emc:wpaper:dte648 |
| By: | Degui Li (Faculty of Business Administration, University of Macau); Bin Peng (Department of Econometrics and Business Statistics, Monash University in Australia); Songqiao Tang (School of Mathematical Sciences, Zhejiang University); Weibiao Wu (Department of Statistics, University of Chicago) |
| Abstract: | This paper introduces a flexible time-varying network vector autoregressive model framework for large-scale time series. A latent group structure is imposed on the heterogeneous and node-specific time-varying momentum and network spillover effects so that the number of unknown time-varying coefficients to be estimated can be reduced considerably. A classic agglomerative clustering algorithm with nonparametrically estimated distance matrix is combined with a ratio criterion to consistently estimate the latent group number and membership. A post-grouping local linear smoothing method is proposed to estimate the group-specific time-varying momentum and network effects, substantially improving the convergence rates of the preliminary estimates which ignore the latent structure. We further modify the methodology and theory to allow for structural breaks in either the group membership, group number or group-specific coefficient functions. Numerical studies including Monte-Carlo simulation and an empirical application are presented to examine the finite-sample performance of the developed model and methodology. |
| Keywords: | cluster analysis, network VAR, latent groups, local linear estimator, time-varying coefficients |
| JEL: | C14 C32 C55 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:boa:wpaper:202526 |
| By: | Andrés Alonso-Robisco (BANCO DE ESPAÑA); Andrés Azqueta-Gavaldón (BANCO DE ESPAÑA); José Manuel Carbó (BANCO DE ESPAÑA); José Luis González (BANCO DE ESPAÑA); Ana Isabel Hernáez (BANCO DE ESPAÑA); José Luis Herrera (BANCO DE ESPAÑA); Jorge Quintana (BANCO DE ESPAÑA); Javier Tarancón (BANCO DE ESPAÑA) |
| Abstract: | New technologies have made available a vast amount of new data in the form of text, recording an exponentially increasing share of human and corporate behavior. For financial supervisors, the information encoded in text is a valuable complement to the more traditional balance sheet data typically used to track the soundness of financial institutions. In this study, we exploit several natural language processing (NLP) techniques as well as network analysis to detect anomalies in the Spanish corporate system, identifying both idiosyncratic and systemic risks. We use sentiment analysis at the corporate level to detect sentiment anomalies for specific corporations (idiosyncratic risks), while employing a wide range of network metrics to monitor systemic risks. In the realm of supervisory technology (SupTech), anomaly detection in sentiment analysis serves as a proactive tool for financial authorities. By continuously monitoring sentiment trends, SupTech applications can provide early warnings of potential financial distress or systemic risks. |
| Keywords: | suptech, natural language processing, machine learning, network analysis, sentiment |
| JEL: | C63 D81 G21 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:bde:opaper:2504 |
| By: | Christian Trudeau (Department of Economics, University of Windsor); Edward C. Rosenthal (Department of Statistics, Operations, and Data Science, Fox School of Business, Temple University) |
| Abstract: | We consider a set of users who are located along a pipeline with a single source. These users consume a good that is extracted from the source and flows downstream, with diminishing marginal returns for each user. In addition, flows along each edge in the pipeline create negative externalities, which are nondecreasing as a function of flow. The users cooperate toward obtaining group welfare maximization. In both the continuous and discrete cases, we obtain the group optimal solutions, and we then use cooperative game theory to determine how best to allocate the damages, using optimistic and pessimistic formulations for the characteristic function. Using core stability as our guiding principle, we provide a set of stable allocations that apportions the damages at a location among the set of downstream users, notably an average damage allocation and a marginal damage allocation. Given that the joint optimization forces agents to reduce (unequally) their consumption, we also examine the Shapley value of the optimistic game, also in the core, that allows to compensate agents who have sacrificed their consumption for the benefit of the group. Finally, we show that our pipeline externalities model generalizes some well-known problems from the literature, including the river sharing problem of Ambec and Sprumont 2002 and the joint production problem of Moulin and Shenker 1992. |
| Keywords: | game theory; network flows; pipeline externalities; core; redistribution. |
| JEL: | C71 D63 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:wis:wpaper:2502 |
| By: | Seda Koymen Ozer (Baskent University, Ankara, Turkey); Alessia Lo Turco (Department of Economics and Social Sciences, Universita' Politecnica delle Marche (UNIVPM)); Daniela Maggioni (Department of Economics, Catholic University of the Sacred) |
| Abstract: | We investigate how the import of automation impacts upgrading within firm production networks. We use comprehensive data on product mix, foreign trade, balance sheets, employment, and firm-to-firm transactions for Turkish manufacturing firms from 2009 to 2020. By employing Propensity Score Matching (PSM) alongside event study analyses and an instrumental variable (IV) approach, our research provides robust evidence that firms importing automation enhance the quality and lower quality-adjusted prices of their products. Importantly, the benefits of automation extend downstream throughout the supply chain to firms sourcing inputs from suppliers that have adopted automation. No significant effects propagate, instead, to upstream firms supplying automation adopters. |
| Keywords: | buyer-supplier links, product upgrading, manufacturing, Turkiye |
| JEL: | O14 F61 F63 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:anc:wpaper:495 |
| By: | Bastien Buchwalter (SKEMA Business School and Universite Cote d’Azur); Francis X. Diebold (University of Pennsylvania & NBER); Kamil Yilmaz (Koc University) |
| Abstract: | We study the properties of macroeconomic survey forecast response averages as the number of survey respondents grows. Such averages are “portfolios” of forecasts. We characterize the speed and pattern of the gains from diversification and their eventual decrease with portfolio size (the number of survey respondents) in both (1) the key real-world data-based environment of the U.S. Survey of Professional Forecasters (SPF), and (2) the theoretical model-based environment of equicorrelated forecast errors. We proceed by proposing and comparing various direct and model-based “crowd size signature plots”, which summarize the forecasting performance of k-average forecasts as a function of k, where k is the number of forecasts in the average. We then estimate the equicorrelation model for growth and inflation forecast errors by choosing model parameters to minimize the divergence between direct and model-based signature plots. The results indicate near-perfect equicorrelation model fit for both growth and inflation, which we explicate by showing analytically that, under conditions, the direct and fitted equicorrelation model-based signature plots are identical at a particular model parameter configuration. We find that the gains from diversification are greater for inflation forecasts than for growth forecasts, but that both gains nevertheless decrease quite quickly, so that fewer SPF respondents than currently used may be adequate. |
| Keywords: | Network, Centrality, Spillover, Contagion, Interdependence, Co-movement |
| JEL: | F01 G01 G15 |
| Date: | 2025–02–21 |
| URL: | https://d.repec.org/n?u=RePEc:pen:papers:25-009 |