DebtStreamness: An Ecological Approach to Credit Flows in Inter-Firm Networks

Anah\'i Rodr\'iguez-Mart\'inez, Silvia Bartolucci, Francesco Caravelli, Victoria Landaberry, Pierpaolo Vivo and Fabio Caccioli

Papers from arXiv.org

Abstract: Understanding how credit flows through inter-firm networks is critical for assessing financial stability and systemic risk. In this study, we introduce DebtStreamness, a novel metric inspired by trophic levels in ecological food webs, to quantify the position of firms within credit chains. By viewing credit as the ``primary energy source'' of the economy, we measure how far credit travels through inter-firm relationships before reaching its final borrowers. Applying this framework to Uruguay's inter-firm credit network, using survey data from the Central Bank, we find that credit chains are generally short, with a tiered structure in which some firms act as intermediaries, lending to others further along the chain. We also find that local network motifs such as loops can substantially increase a firm's DebtStreamness, even when its direct borrowing from banks remains the same. Comparing our results with standard economic classifications based on input-output linkages, we find that DebtStreamness captures distinct financial structures not visible through production data. We further validate our approach using two maximum-entropy network reconstruction methods, demonstrating the robustness of DebtStreamness in capturing systemic credit structures. These results suggest that DebtStreamness offers a complementary ecological perspective on systemic credit risk and highlights the role of hidden financial intermediation in firm networks.

Date: 2025-05
New Economics Papers: this item is included in nep-fdg and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2505.01326 Latest version (application/pdf)

Related works:
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:arx:papers:2505.01326

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().