Abstract

http://ssrn.com/abstract=2064141
 
 

References (23)



 
 

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Geography of Firms and Propagation of Local Economic Shocks


Gennaro Bernile


Singapore Management University - Lee Kong Chian School of Business

Stefanos Delikouras


University of Miami

George M. Korniotis


University of Miami

Alok Kumar


University of Miami - School of Business Administration

May 20, 2015


Abstract:     
We use information from 10-K filings to identify economic connections among U.S. states. These connections provide a measure of economic distance that does not merely reflect physical proximity or industry connections. At the firm level, there is excess comovement in the returns and liquidity of firms headquartered in economically connected states. At the aggregate level, the economic connections create spillover effects whereby economic shocks in a state affect its connected states and the U.S. economy. For example, a one percent production shock in California (Texas) is related to a 6.71 (5.62) percent change in annual U.S. GDP growth, relative to the average GDP growth. Collectively, the network of publicly-traded firms generates a channel that facilitates the propagation of local shocks across the U.S. economy.

Number of Pages in PDF File: 67

Keywords: Economic networks, 10-K reports, U.S. states, Gross state product (GSP), predictability

JEL Classification: C23, E32, E37, G10


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Date posted: May 22, 2012 ; Last revised: May 21, 2016

Suggested Citation

Bernile, Gennaro and Delikouras, Stefanos and Korniotis, George M. and Kumar, Alok, Geography of Firms and Propagation of Local Economic Shocks (May 20, 2015). Available at SSRN: http://ssrn.com/abstract=2064141 or http://dx.doi.org/10.2139/ssrn.2064141

Contact Information

Gennaro Bernile
Singapore Management University - Lee Kong Chian School of Business ( email )
50 Stamford Road
Level 4
Singapore, 178899
Singapore
+65-68085478 (Phone)

Stefanos Delikouras
University of Miami ( email )
Coral Gables, FL 33124
United States
George M. Korniotis
University of Miami ( email )
P.O. Box 248094
Coral Gables, FL 33124-6552
United States
305-284-5728 (Phone)
Alok Kumar (Contact Author)
University of Miami - School of Business Administration ( email )
514 Jenkins Building
Department of Finance
Coral Gables, FL 33124-6552
United States
305-284-1882 (Phone)
HOME PAGE: http://moya.bus.miami.edu/~akumar
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