Investigating the impact of technology and noise shocks on capital flows

Yang, Yang; Tang, Yongbing; Zhang, Ren; Wu, Lifeng

doi:10.1016/j.frl.2023.104051

Cited by 2 publications

(1 citation statement)

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“…Commonly utilized approaches such as regression and modeling analysis offer insights into capital flow. For instance, regression analysis assesses the effect of global financial cycles (the COVID shock) and uncertainties of cross-border capital flow [ 1 , 2 , 3 ], with studies indicating that heightened capital flow uncertainty often triggers market perturbations and crashes [ 4 ]. Additionally, models have been designed to examine the impact of production systems on capital flows [ 5 ].…”

Section: Introductionmentioning

confidence: 99%

Spreading Dynamics of Capital Flow Transfer in Complex Financial Networks

Peng,

Chen,

Zheng

et al. 2023

Entropy

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The financial system, a complex network, operates primarily through the exchange of capital, where the role of information is critical. This study utilizes the transfer entropy method to examine the strength and direction of information flow among different capital flow time series and investigate the community structure within the transfer networks. Moreover, the spreading dynamics of the capital flow transfer networks are observed, and the importance and traveling time of each node are explored. The results imply a dominant role for the food and drink industry within the Chinese market, with increased attention towards the computer industry starting in 2014. The community structure of the capital flow transfer networks significantly differs from those constructed from stock prices, with the main sector predominantly encompassing industry leaders favored by primary funds with robust capital flow connections. The average traveling time from sectors such as food and drink, coal, and utilities to other sectors is the shortest, and the dynamic flow between these sectors displays a significant role. These findings highlight that comprehension of information flow and community structure within the financial system can offer valuable insights into market dynamics and help to identify key sectors and companies.

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