The Double-Edged Sword of Global Integration: Robustness, Fragility \& Contagion in the International Firm Network

Everett Grant

No 506, 2018 Meeting Papers from Society for Economic Dynamics

Abstract: We use daily equity returns to estimate global inter-firm networks across all major industries from 1981-2016 and test whether the network is robust or fragile, relating multinational firms' overall health with global integration. More connected firms are less likely to be in distress and have higher profit growth and equity returns, but are also more exposed to direct contagion from distressed neighboring firms and network level crises. Our machine learning analysis reveals the centrality of finance in the international firm network and increased globalization over time, with greater potential for crises to spread globally when they do occur.

Date: 2018
New Economics Papers: this item is included in nep-bec, nep-big, nep-ifn, nep-int and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://red-files-public.s3.amazonaws.com/meetpapers/2018/paper_506.pdf (application/pdf)

Related works:
Working Paper: The Double-Edged Sword of Global Integration: Robustness, Fragility & Contagion in the International Firm Network (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:sed018:506

Access Statistics for this paper

More papers in 2018 Meeting Papers from Society for Economic Dynamics Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().