Networks and Economic Fragility

Elliott, Matthew; Golub, Benjamin

doi:10.1146/annurev-economics-051520-021647

Cited by 34 publications

(18 citation statements)

References 82 publications

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“…We note again that this explanation is more reasonable for smaller firms such as those in our vertical diversification sample. Another possible explanation is that vertically diversified firms may be overly reliant on a single output and are thus “fragile” or overly sensitive to disruptions to their input supply chain (Elliott et al, 2022; Elliott & Golub, 2022; Wahdat & Lusk, 2023).…”

Section: Discussionmentioning

confidence: 99%

“…Diversification within segments, however, appears to increase firm resilience, perhaps by diversifying market risks within a single area of strength. Another possible explanation relates to recent models of supply networks and firm fragility (Elliott et al, 2022; Elliott & Golub, 2022). Specifically, horizontally diversified firms may be better insured against supply chain disruptions because they have a wider range of outputs and can substitute away from those products experiencing input disruptions and toward those products with functioning input supply chains.…”

Section: Introductionmentioning

confidence: 99%

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Diversification and resilience of firms in the agrifood supply chain

Stevens

Teal

2023

American J Agri Economics

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Are diversified firms more resilient to negative market shocks than specialized firms? We answer this question in the context of the COVID‐19 pandemic by analyzing data from small‐ and medium‐sized firms in the U.S. agrifood supply chain. We first develop revenue‐based measures of firms' vertical (across supply‐chain segment) and horizontal (within supply‐chain segment) diversification. We then compare post pandemic outcomes of more diversified and less diversified firms using several inverse‐probability weighting techniques. We find that vertical diversification reduces firms' resilience, whereas horizontal diversification increases firms' resilience.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Diversification and resilience of firms in the agrifood supply chain

Stevens

Teal

2023

American J Agri Economics

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“…Since the financial crisis of 2008 it has become clear that linkages between actors such as firms or banks are complex and often hidden, yet because endogenous network interactions cause feedback loops and have multiplier effects, they can have enormous implications for the evolution of financial crisis or propagation of supply shocks in aggregate. Identifying such synchronicity is a critical first step to putting in place policies to reduce the fragility of economic systems (Elliott and Golub, 2022;Goldstein et al, 2022).van Vliet (2018 studies the interconnectedness between the largest financial institutions in during the 2008 financial crisis using readlily available market data, in which N = 13 and T = 500.…”

Section: Discussionmentioning

confidence: 99%

Identifying network ties from panel data: theory and an application to tax competition

Paula¹,

Rasul²,

Souza³

2023

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Social interactions determine many economic behaviors, but information on social ties does not exist in most publicly available and widely used datasets. We present results on the identification of social networks from observational panel data that contains no information on social ties between agents. In the context of a canonical social interactions model, we provide sufficient conditions under which the social interactions matrix, endogenous and exogenous social effect parameters are all globally identified. While this result is relevant across different estimation strategies, we then describe how high-dimensional estimation techniques can be used to estimate the interactions model based on the Adaptive Elastic Net Generalized Method of Moments. We employ the method to study tax competition across US states. We find that the identified social interactions matrix implies tax competition differs markedly from the common assumption of competition between geographically neighboring states, providing further insights for the long-standing debate on the relative roles of factor mobility and yardstick competition in driving tax setting behavior across states. Most broadly, our identification and application show that the analysis of social interactions can be extended to economic realms where no network data exists. JEL Codes: C31, D85, H71. * We gratefully acknowledge financial support from the ESRC through the Centre for the Microeconomic Analysis of Public Policy (ES/T014334/1), the Centre for Microdata Methods and Practice (RES-589-28-0001) and the Large Research Grant ES/P008909/1 and from the ERC (SG338187). We thank Edo Airoldi,

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“…For that matter, due to their interconnected nature, socioeconomic systems pose a challenge for policymakers and regulators. In this context, an accurate mapping of the complexity of technological, economic and social ties can assist policymakers and regulators with designing and enacting policies [ 96 , 97 ].…”

Section: Methodsmentioning

confidence: 99%

Empirical investigation on how wellbeing-related infrastructure shapes economic growth: Evidence from the European Union regions

et al. 2023

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One of the most important policies of the European Union is regional development, which comprises measures of enhancing economic growth and citizens’ living standards via strategic investment. Considering that economic growth and wellbeing are intertwined from the perspective of EU policies, this study examines the relationship between wellbeing-related infrastructure and economic growth in 212 NUTS 2 regional subdivisions across the members of Eu-28 during the period 2001–2020. We therefore analyzed data from 151 Western Europe regions and 61 Central and Eastern Europe regions by means of a panel data analysis with the first-difference generalized method of moments estimator. Our main interest was to determine the degree to which Western Europe regions responded to predictors as compared to Central and Eastern Europe regions. According to the empirical results, the predictors with the strongest influence for Western Europe regions were disposable household income, inter-regional mobility, housing indicator, labor force and participation. For Central and Eastern Europe regions, the largest impact was triggered by the housing indicator, internet broadband access and air pollution. In addition, we determined a relational weighted multiplex between all variables of interest by using dynamic time warping and we introduced topological measures in a multilayer multiplex model for both regional subsamples.

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Networks and Economic Fragility

Cited by 34 publications

References 82 publications

Diversification and resilience of firms in the agrifood supply chain

Diversification and resilience of firms in the agrifood supply chain

Identifying network ties from panel data: theory and an application to tax competition

Empirical investigation on how wellbeing-related infrastructure shapes economic growth: Evidence from the European Union regions

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