Transaction Network Structural Shift under Crisis: Macro and Micro Perspectives (doi:10.34820/FK2/06LQEJ)

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Transaction Network Structural Shift under Crisis: Macro and Micro Perspectives

doi:10.34820/FK2/06LQEJ

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2022-03-04

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Andry Alamsyah; Dian Puteri Ramadhani; Farida Titik Kristanti; Khairunnisa Khairunnisa, 2022, "Transaction Network Structural Shift under Crisis: Macro and Micro Perspectives", https://doi.org/10.34820/FK2/06LQEJ, Root, V1

Transaction Network Structural Shift under Crisis: Macro and Micro Perspectives

doi:10.34820/FK2/06LQEJ

Andry Alamsyah (Telkom University)

Dian Puteri Ramadhani (Telkom Universitas)

Farida Titik Kristanti (Telkom Universitas)

Khairunnisa Khairunnisa (Telkom Universitas)

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KHAIRUNNISA, KHAIRUNNISA

KHAIRUNNISA, KHAIRUNNISA

2022-03-04

Business and Management, transaction network; network structure; network topology; network motifs; financial crisis

In 2008, the Lehman Brothers’ bankruptcy, accumulated from the global financial crisis, proved a unique role of the highly interconnected financial entities. Shocks in a bank might trigger loss, induce spillovers, provoke a contagion shock spreading to other entities, trigger the whole banking system to collapse, and ultimately unsettle the worldwide economy. Therefore, evaluating financial stability through a system-wide network approach provides more adequate knowledge than evaluating a bank as an individual. In this approach, individual banks and their transaction activities are modeled into a transaction network, forming a network topology. Financial shocks are generally detected through various macro procedures, such as outstanding external debt and uncontrolled transaction deficits. This study proposes financial shock detection from a macro and micro perspective by exploring the effect of disruption on transaction network structure. We investigate the most changing triadic motif as a crisis predictor from a micro perspective due to the crisis period. The case study is the transaction network structural shift under the 2008 crisis in Indonesia, where the observations were performed from the pre-crisis to the post-crisis period. We discovered a motif with the significant changes as the underlying financial crisis predictor. This scenario provides support for the financial system’s stability control

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Alamsyah, A.; Ramadhani, D.P.; Kristanti, F.T.; Khairunnisa, K. Transaction Network Structural Shift under Crisis: Macro and Micro Perspectives. Economies 2022, 10, 56. https://doi.org/10.3390/economies10030056

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economies-10-00056.pdf

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