Dynamical macroprudential stress testing using network theory

The increasing frequency and scope of financial crises have made global financial stability one of the major concerns of economic policy and decision makers. This has led to the understanding that financial and banking supervision has to be thought of as a systemic task, focusing on the interdependent relations among the institutions. Using network theory, we develop a dynamic model that uses a bipartite network of banks and their assets to analyze the system’s sensitivity to external shocks in individual asset classes and to evaluate the presence of features underlying the system that could lead to contagion. As a case study, we apply the model to stress test the Venezuelan banking system from 1998 to 2013. The introduced model was able to capture monthly changes in the structure of the system and the sensitivity of bank portfolios to different external shock scenarios and to identify systemic vulnerabilities and their time evolution. The model provides new tools for policy makers and supervision agencies to use for macroprudential dynamical stress testing.     

Neighbourhood Effects as Indirect Effects: Evidence from a Dutch Case Study on the Significance of Neighbourhood for Employment Trajectories

One of the key challenges in the study of neighbourhood effects on work is to understand the pathways through which disadvantaged neighbourhoods impact the employment opportunities of residents. Endogenous explanations for neighbourhood effects focus on social life in these neighbourhoods, identifying mechanisms of social isolation, deviant work ethics and neighbourhood disorder. This article studies these mechanisms in a low‐income neighbourhood in the Netherlands. The case study shows that unfavourable socioeconomic outcomes can be indirect and unintended consequences of actions and choices in everyday life that are not directly concerned with work. Nevertheless, these individual actions and choices reflect local social practices that are influenced by the marginalized context in which residents lead their lives.     

Development and transformation of collaborative networks in events

This study examines the mechanisms by which and the reasons that leaders of non-profit organizations transform interorganizational collaborative networks through event attendance. Drawing from a two-wave survey, this study examines the interorganizational networks of 30 individuals who participated in both waves, along with the reported activities of 121 individuals who participated in the second wave of the survey. This mixed methods study found that events transformed participants’ weak ties into strong ties and promoted development of collaborative networks. Further, the study found that participants’ motivations for attending the event and following up with contacts afterward focused on sharing resources and deepening connections. Implications for understanding how events promote formation and transformation of collaborative networks are discussed.     

出租汽车计价器加密传感器设计

文章对出租汽车计价器加密传感器的加密原理、几种入侵方式进行分析。     

Macro-Networks: An application to euro area financial accounts

This paper develops a financial network, designated the “Macro-Network”, that depicts the connections between the main financial and non-financial sectors of the economy in the various financial instruments of the euro area. The Macro-Network comprises of linkages across financial and non-financial sectors in each country. These country-level sector networks are then connected by the cross-border links between the individual banking sectors. Using the Macro-Network to simulate financial shocks, we find that the propagation effects depend on the underlying network structure, which evolves over time. After the financial crisis, bilateral linkages contracted sharply, reflecting the surge in counterparty risk and the de-leveraging processes. Nonetheless, our analysis suggests that even after this process, vulnerabilities remained in the euro area financial system, while a more diversified portfolio of cross-border exposures might mitigate the shock effects. We identify sectors which are most relevant for the propagation of financial shocks in the Macro-Network.     

Neighborhood quality and labor market outcomes: Evidence from quasi-random neighborhood assignment of immigrants

Settlement in a socially deprived neighborhood may hamper individual labor market outcomes because of lack of employed or highly skilled contacts. I investigate this hypothesis by exploiting a unique natural experiment that occurred between 1986 and 1998 when refugee immigrants to Denmark were assigned to municipalities quasi-randomly, which successfully addresses the methodological problem of endogenous neighborhood selection. I show that individuals sort into neighborhoods. Taking account of location sorting, living in a socially deprived neighborhood does not affect labor market outcomes of refugee men. Their labor market outcomes are also not affected by the overall employment rate and the overall average skill level in the neighborhood. However, an increase in the average skill level of non-Western immigrant men living in the neighborhood raises their employment probability, while an increase in the employment rate of co-national men living in the neighborhood raises their real annual earnings. This provides quasi-experimental evidence that residence-based job information networks are ethnically stratified.     

Global supply network embeddedness and power: An analysis of international joint venture formations

As a subset of the international business literature, cross-border equity based partnerships have drawn significant academic attention. In the context of inter-firm partnerships, the power dynamics between parties and the implications that power has on the relational dynamics between firms is an important consideration. Research that connects power with network theory has recently emerged, suggesting that the network, as a source of power, plays a significant role in inter-firm dynamics. Yet, while there has been a substantial body of work either articulating the antecedents and consequences of power, little research has paid attention to the role that power plays in international JV formations; this presents a significant gap in the international business literature. Consequently, this study investigates the role that global network structure plays in the formation of new equity based international partnerships. Secondly, it contributes to the international JV literature by developing and testing a theoretical framework that examines inter-firm power dynamics as derived from the network position of each firm in the global network. Global network prominence, brokerage and weakness are key factors utilized in the analysis. The hypotheses are tested using a global manufacturing joint venture longitudinal dataset that contains 985,689 observations from 1985 to 2003. The results of the event history analysis indicate that for the manufacturer global network prominence, brokerage and weakness play an important role in new joint venture formations. On the other hand, only global network prominence is a significant factor for the potential partner.     

Systemic risk and dynamics of contagion: a duplex inter-bank network

This paper constructs a duplex banking network formed by credit relationships and information interaction via the banks’ balance sheet to model the structure of systemic risk and investigate the dynamic mechanism of contagion in terms of default and liquidity infection along with the factors that affect the extent of the contagion. We systematically explain the role that duplex banking networks play in different aspects of risk contagion. Through theoretical analysis and simulations, we conclude that asymmetric information interaction would increase the inflexibility of the system, which leads to liquidity shortage and possibly the collapse of the whole market. The weakness of systemic risk in the interior of the complex banking system can be characterized by the partial discount factor using illiquid assets in the information network. By improving the connectedness of the information network of the duplex networks, the spread of contagion can be partially slowed.     

The indirect effects of foreign direct investment on trade: A network perspective

The relationship between international trade and foreign direct investment (FDI) is one of the main features of globalisation. In this paper, we investigate the effects of FDI on trade from a network perspective, since FDI takes not only direct but also indirect channels from origin to destination countries because of firms’ incentive to reduce tax burden, to minimise coordination costs and to break barriers to market entry. We use a unique data set of international corporate control as a measure of stock FDI to construct a corporate control network (CCN), where the nodes are the countries and the edges are the corporate control relationships. Network measures, as the shortest path length and the communicability, are then computed on the CCN to capture the indirect channel of FDI. Empirically, we find that corporate control has a positive effect on trade both directly and indirectly. The result is robust with different specifications and estimation strategies. Hence, our paper provides strong empirical evidence of the indirect effects of FDI on trade. Moreover, we identify a number of interplaying factors such as regional trade agreements and the region of Asia. We also find that the indirect effects are more pronounced for the manufacturing sector than for primary sectors such as oil extraction and agriculture.