IDEAS home Printed from https://ideas.repec.org/p/arx/papers/1602.04352.html
   My bibliography  Save this paper

On the topologic structure of economic complex networks: Empirical evidence from large scale payment network of Estonia

Author

Listed:
  • Stephanie Rend'on de la Torre
  • Jaan Kalda
  • Robert Kitt
  • Juri Engelbrecht

Abstract

This paper presents the first topological analysis of the economic structure of an entire country based on payments data obtained from Swedbank. This data set is exclusive in its kind because around 80% of Estonia's bank transactions are done through Swedbank, hence, the economic structure of the country can be reconstructed. Scale-free networks are commonly observed in a wide array of different contexts such as nature and society. In this paper, the nodes are comprised by customers of the bank (legal entities) and the links are established by payments between these nodes. We study the scaling-free and structural properties of this network. We also describe its topology, components and behaviors. We show that this network shares typical structural characteristics known in other complex networks: degree distributions follow a power law, low clustering coefficient and low average shortest path length. We identify the key nodes of the network and perform simulations of resiliency against random and targeted attacks of the nodes with two different approaches. With this, we find that by identifying and studying the links between the nodes is possible to perform vulnerability analysis of the Estonian economy with respect to economic shocks.

Suggested Citation

  • Stephanie Rend'on de la Torre & Jaan Kalda & Robert Kitt & Juri Engelbrecht, 2016. "On the topologic structure of economic complex networks: Empirical evidence from large scale payment network of Estonia," Papers 1602.04352, arXiv.org.
    • Handle: RePEc:arx:papers:1602.04352
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/1602.04352
    File Function: Latest version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Barabási, Albert-László & Albert, Réka & Jeong, Hawoong, 1999. "Mean-field theory for scale-free random networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 272(1), pages 173-187.
    2. Frank Schweitzer & Giorgio Fagiolo & Didier Sornette & Fernando Vega-Redondo & Douglas R. White, 2009. "Economic Networks: What Do We Know And What Do We Need To Know?," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 12(04n05), pages 407-422.
    3. Kirsten Bonde Rørdam & Morten Linnemann Bech, 2008. "The Topology of Danish Interbank Money Flows," FRU Working Papers 2009/01, University of Copenhagen. Department of Economics. Finance Research Unit.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Carbone, Anna & Jensen, Meiko & Sato, Aki-Hiro, 2016. "Challenges in data science: a complex systems perspective," Chaos, Solitons & Fractals, Elsevier, vol. 90(C), pages 1-7.
    2. Edgar J. Sánchez Carrera & Vanesa Avalos-Gaytán & Yajaira Cardona Valdés, 2019. "Synchronization of globalized economies," Working Papers 1909, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2019.
    3. Clemente, G.P. & Grassi, R., 2018. "Directed clustering in weighted networks: A new perspective," Chaos, Solitons & Fractals, Elsevier, vol. 107(C), pages 26-38.
    4. Shuwen Gong & Huiwen Zou, 2023. "Simulation of interactive contagion between depositors' panic and banking risk," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(1), pages 392-404, January.
    5. Wang Yijie & Ke Yanyan & Ma Xianrui & Ren Yitian, 2020. "What is the Industrial Structure Changes of China?," Journal of Systems Science and Information, De Gruyter, vol. 8(6), pages 487-503, December.
    6. Hazan, Aurélien, 2019. "A maximum entropy network reconstruction of macroeconomic models," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 519(C), pages 1-17.
    7. Carolina E S Mattsson & Teodoro Criscione & Frank W Takes, 2022. "Circulation of a digital community currency," Papers 2207.08941, arXiv.org, revised Jun 2023.
    8. Cerqueti, Roy & Deffains-Crapsky, Catherine & Storani, Saverio, 2022. "Similarity-based heterogeneity and cohesiveness of networked companies issuing minibonds," Chaos, Solitons & Fractals, Elsevier, vol. 164(C).
    9. Zhao Li & Ren Zhuoming & Zhao Ziyi & Weng Tongfeng, 2024. "Topological perturbations on resilience of the world trade competition network," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-9, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rendón de la Torre, Stephanie & Kalda, Jaan & Kitt, Robert & Engelbrecht, Jüri, 2016. "On the topologic structure of economic complex networks: Empirical evidence from large scale payment network of Estonia," Chaos, Solitons & Fractals, Elsevier, vol. 90(C), pages 18-27.
    2. Liang, Wei & Shi, Yuming & Huang, Qiuling, 2014. "Modeling the Chinese language as an evolving network," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 393(C), pages 268-276.
    3. Andreas Koulouris & Ioannis Katerelos & Theodore Tsekeris, 2013. "Multi-Equilibria Regulation Agent-Based Model of Opinion Dynamics in Social Networks," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 11(1), pages 51-70.
    4. Yan Qiang & Bo Pei & Weili Wu & Juanjuan Zhao & Xiaolong Zhang & Yue Li & Lidong Wu, 2014. "Improvement of path analysis algorithm in social networks based on HBase," Journal of Combinatorial Optimization, Springer, vol. 28(3), pages 588-599, October.
    5. Langfield, Sam & Liu, Zijun & Ota, Tomohiro, 2014. "Mapping the UK interbank system," Journal of Banking & Finance, Elsevier, vol. 45(C), pages 288-303.
    6. Gabrielle Demange, 2012. "On the influence of a ranking system," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 39(2), pages 431-455, July.
    7. John Rutledge, 2015. "Economics as energy framework: Complexity, turbulence, financial crises, and protectionism," Review of Financial Economics, John Wiley & Sons, vol. 25(1), pages 10-18, April.
    8. Tsao, J.Y. & Boyack, K.W. & Coltrin, M.E. & Turnley, J.G. & Gauster, W.B., 2008. "Galileo's stream: A framework for understanding knowledge production," Research Policy, Elsevier, vol. 37(2), pages 330-352, March.
    9. Pier Paolo Saviotti, 2011. "Knowledge, Complexity and Networks," Chapters, in: Cristiano Antonelli (ed.), Handbook on the Economic Complexity of Technological Change, chapter 6, Edward Elgar Publishing.
    10. Duan, Shuyu & Wen, Tao & Jiang, Wen, 2019. "A new information dimension of complex network based on Rényi entropy," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 516(C), pages 529-542.
    11. Chung-Yuan Huang & Chuen-Tsai Sun & Hsun-Cheng Lin, 2005. "Influence of Local Information on Social Simulations in Small-World Network Models," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 8(4), pages 1-8.
    12. Sun, Bingbin & Yao, Jialing & Xi, Lifeng, 2019. "Eigentime identities of fractal sailboat networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 520(C), pages 338-349.
    13. Yang, Xu-Hua & Lou, Shun-Li & Chen, Guang & Chen, Sheng-Yong & Huang, Wei, 2013. "Scale-free networks via attaching to random neighbors," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(17), pages 3531-3536.
    14. Colizza, Vittoria & Flammini, Alessandro & Maritan, Amos & Vespignani, Alessandro, 2005. "Characterization and modeling of protein–protein interaction networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 352(1), pages 1-27.
    15. Wouter Vermeer & Otto Koppius & Peter Vervest, 2018. "The Radiation-Transmission-Reception (RTR) model of propagation: Implications for the effectiveness of network interventions," PLOS ONE, Public Library of Science, vol. 13(12), pages 1-21, December.
    16. Haider, Sajjad & Mariotti, Francesca, 2016. "The orchestration of alliance portfolios: The role of alliance portfolio capability," Scandinavian Journal of Management, Elsevier, vol. 32(3), pages 127-141.
    17. Lotfi, Nastaran & Rodrigues, Francisco A., 2022. "On the effect of memory on the Prisoner’s Dilemma game in correlated networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 607(C).
    18. Laurienti, Paul J. & Joyce, Karen E. & Telesford, Qawi K. & Burdette, Jonathan H. & Hayasaka, Satoru, 2011. "Universal fractal scaling of self-organized networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(20), pages 3608-3613.
    19. L. Jarina Banu & P. Balasubramaniam, 2014. "Synchronisation of discrete-time complex networks with randomly occurring uncertainties, nonlinearities and time-delays," International Journal of Systems Science, Taylor & Francis Journals, vol. 45(7), pages 1427-1450, July.
    20. Chen, Qinghua & Shi, Dinghua, 2004. "The modeling of scale-free networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 335(1), pages 240-248.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:1602.04352. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.